Ul LUENelion of an error" was a result of a change in estimate (useful life of certain assets reduced Lt OF $6,000,000. uars and a catch-up adjustment made). 4. Nerwin Company disclosed earnings per common share for net income in the notes to the financial statements. Instructions Determine from these additional facts whether the presentation of the facts in the Nerwin Company income and retained earnings statement is appropriate. If the presentation is not appropriate, describe the appropriate presentation and discuss its theoretical rationale. (Do not prepare a revised statement.) P4-6 (LO4,5,6) (Retained Earnings Statement, Prior Period Adjustment) Below is the Retained Earnings account for the year 2017 for Acadian Corp. Retained earings, January 1, 2017 Add: Gain on sale of investments (net of tax) Net income Refund on litigation with government, related to the year 2014 (net of tax) Recognition of income earned in 2016, but omitted from income statement in that year (net of tax) A bh $257,600 $41,200 84,500 21,600 25400 172,700 n 430,300 P UOPRD AO Deduct: Loss on discontinued operations (net of tax) Write-off of goodwill (net of tax) Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in 2017 (net of tax) Cash dividends declared goo 35,000 60,000 c oani ni nivon b 23,200 32,000 150,200 ena $280,100 Retained earnings, December 31, 2017 Instructions (a) Prepare a corrected retained earnings statement. Acadian Corp. normally sells investments of the type mentioned above FIFO inventory was used in 2017 to compute net income. (b) State where the items that do not appear in the corrected retained earnings statement should be shown. 4-7 (L03,4,5) GROUPWORK (Income Statement, Irregular Items) Wade Corp. has 150,000 shares of common stock out- anding. In 2017, the company reports income from continuing operations before income tax of $1,210,000. Additional transac- ons not considered in the $1,210,000 are as follows. uipment for $40,000. The machine had originally cost $80,000 and had accumulated deprecia