Pronghorn Corp. began operations in $2014.$ During the years $2014-2016,$ it reported net income and declared dividends as follows.

Net income

Dividends declared

During $2017,$ Pronghorn Corp.:

$,$ discovered that it had failed, in $2015,$ to record $$50,000$ in depreciation on equipment in one of its warehouses.

$,$ changed, on January $1,2017,$ from the average cost to the FIFO method of accounting for its inventory. If Pronghorn Corp.

had applied the FIFO method to it inventory in prior years, cumulative net income $($before tax$)$ would have been $$16,000$

lower than originally reported.

$,$ reported income before income tax expense of $$360,000.$

$,$ declared and paid dividends to common shareholders of $$80,000.$

Pronghorn's effective income tax rate for all years was $40\%.$

$($a$)$

Prepare a $2017$ retained earnings statement for Pronghorn Corp. $($List items that increase retained earnings first.$)$

PRONGHORN CORPORATION

Retained Earnings Statement