Question $34(10$ points$)$

a$)$ Shooting Star was formed in $2019$ and is undergoing an audit for the first time for the year ended $12/31/2021.$ As part of the audit it was discovered that $$30,000$ debited to repairs & maintenance expense at the beginning of $2019$ should have been capitalized as leasehold improvements. Since the $2019$ & $2020$ financial statements were not public, the change will be reported on the $2021$ financial statements as a prior period adjustment. Using a $30\%$ tax rate, give the necessary journal entries related to correcting $2019$ & $2020.$ Leasehold improvements are depreciated over $15$ years.

b$)$ Also, the unadjusted balance of retained earnings is $$8,000$ on $1/1/2021.$ The net income for the year ended $12/31/2021$ is $$30,000.$ No dividends were paid. Prepare the Retained Earnings Statement for the year ended $12/31/2021.$