Problem - Below is the Retained Earnings account for the year 2012 for Acadian Corp.
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Retained earnings, January 1, 2012
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$261,302
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Add:
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Gain on sale of investments (net of tax)
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$44,902
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Net income
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88,202
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Refund on litigation with government, related to the year 2009
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(net of tax)
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25,302
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Recognition of income earned in 2011, but omitted from income
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statement in that year (net of tax)
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29,102
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187,508
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448,810
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Deduct:
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Loss on discontinued operations (net of tax)
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38,702
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Write-off of goodwill (net of tax)
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63,702
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Cumulative effect on income of prior years in changing from
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LIFO to FIFO inventory valuation in 2012 (net of tax)
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26,902
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Cash dividends declared
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35,702
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165,008
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Retained earnings, December 31, 2012
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$283,802
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Prepare a corrected retained earnings statement. Acadian Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2012 to compute net income.