The Heights Corporation began operations on January 1, 20x1. You have recent selected as the new accountant for the company and have been presented with information bee the fol HEIGHTS CORPORATION Income Statement For the Year Ended December 31, 20x8 Sales Cost of Goods Sold $ 8,412,690 Gross Profit Selling and Administrative Expenses Income from operations Other Gains and Losses 3,854,245 4,558,445 1,800,000 2,758,445 Gain on sale of Investments $ 2,400,00o 1,900,000 Loss from disposal of subsidiary Income from continulng operations before Income Taxes Income Tax (30%) Net Income 500,000 3,258,445 977,534 $2,280,912 HEIGHTS CORPORATION Statement of Retained Earnings For the Year Ended December 31, 20x8 Retained Earnings, 1/1/x8 Add: Net Income Sub-total Less: Dividends Retained Earnings, 12/31/x8 $6,400,000 2,280,912 8,680,912 850,000 $7,830,912 In addition, this information was provided: 1) Common shares outstanding during the entire year (20x8) totaled 500,000. No shares were 2) A warehouse was acquired on January 1, 20x1 for $500,000; straight-line depreciation was purchased or sold during 20x8. used, with an estimated salvage value of 10% and an estimated life of 10 years. The warehouse was sold for $280,000 on November 1, 20x6. A revlew of this transaction indicated that depreclation was never recorded for the ten months of 20x6 (from January 1 through November 1) and, consequently, the gain reported In 20x6 was Incorrectly stated