The balance in retained earnings on January 1, 2017, for Hotel Plaza Inc., was $575,000. During the year, the corporation paid cash dividends of $70,000 and distributed a stock dividend of $15,000. In addition, the company determined that it had understated its cost of good sold in prior years by $50,000. Net income for 2017 was $125,000.

Instructions

Prepare the retained earnings statement for 2017.