Bright House, Inc., a household products chain, reported a prior- period adjustment in 2014. An accounting error caused net income of 2013 to be overstated by $ 13 million. Retained earnings at December 31, 2013, as previously reported, was $ 418 million. Net income for 2014 was $ 88 million, and 2014 dividends declared were $ 41 million.

Requirement
Using the end-of-chapter summary problem (pages 637– 638) as an example, prepare the company’s statement of retained earnings for the year ended December 31, 2014. How does the prior- period adjustment affect Bright House’s net income for 2014?