Splish Corporation began operations January 1, 2019. During its st 3 years of operations, Splish reported net income and declared dividends as follows:
Dividends declared
Net income
2019
$50,400
$-0-
2020
157,500
63,000
2021
201,600
63,000
The following information relates to 2022.
Income before income tax
$277,200
Prior period adjustment: understatement of 2020 depreciation expense (before taxes)
$31,500
Cumulative decrease in income from change in inventory methods (before taxes)
$56,700
Dividends declared (of this amount, $31,500 will be paid on Jan. 15, 2023)
$126,000
Effective tax rate
20 %
(a)
Prepare a 2022 retained earnings statement for Splish Corporation. (List items that increase adjusted retained earnings first.)
Balance, January 1, as Reported
Correction for Depreciation Error Net of Tax
SPLISH CORPORATION
Retained Earnings Statement
For the Year Ended December 31, 2022
Cumulative Decrease in Income from Change in Inventory Methods Net of Tax
Balance, January 1, as Adjusted
Add: Net Income/(Loss)
Less: Dividends Declared
Balance, December 31
$
