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(Retained Earnings Statement) McEntire Corporation began operations on January 1, 2009. During its first 3 years of operations, McEntire reported net income and declared dividends

(Retained Earnings Statement)

McEntire Corporation began operations on January 1, 2009. During its first 3 years of operations, McEntire reported net income and declared dividends as follows.

Net income Dividends declared
2009 $47,900 $ -0-
2010 132,700 53,200
2011 162,700 57,500

The following information relates to 2012.

Income before income tax $243,500
Prior period adjustment: understatement of 2010 depreciation expense (before taxes) $25,200
Cumulative decrease in income from change in inventory methods (before taxes) $41,800
Dividends declared (of this amount, $25,000 will be paid on Jan. 15, 2013) $100,000
Effective tax rate 40%

(a)

Prepare a 2012 retained earnings statement for McEntire Corporation. (Enter all amounts as positive amounts and subtract where necessary.)

(b) Assume McEntire Corp. restricted retained earnings in the amount of $70,000 on December 31, 2012. After this action, what would McEntire report as total retained earnings in its December 31, 2012, balance sheet?

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