Presented below is a combined income and retained earnings statement for Sapporo Company for 2015 (amounts in thousands).

Instructions

Determine from these additional facts whether the presentation of the facts in the Sapporo Company income and retained earnings statement is appropriate. If the presentation is not appropriate, describe the appropriate presentation and discuss its theoretical rationale. 

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Retained earnings, January 1, 2015 Add: Gain on sale of investments $257,600 $41,200 Net income 84,500 Refund on litigation with government 21,600 Recognition of income earned in 2014, but omitted from income statement in that year 25,400 172,700 430,300 Deduct: Loss on discontinued operations 35,000 Write-off of goodwill 60,000 Cumulative effect on income of prior years in changing from average-cost to FIFO inventory valuation in 2015 23,200 Cash dividends declared 32,000 150,200 Retained earnings, December 31, 2015 $280,100