Comparative statements for Bodie Corporation are as follows:

In 2012, Bodie Corporation discovers that ending inventory for 2011 was understated by $77,000.
Prepare comparative income and retained earnings statements for 2011 and 2012. Ignore income tax effects, and assume that the 2012 books have not been closed.

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Bodie Corporation Income Statements and Statement of Retained Earnings For the Years Ended December 31 2012 2011 Sales Cost of goods sold Gross profit Expenses Net income Beginning retained eamings Net income Dividends Ending retaned eings $4,600,000 $4,350,000 2,305,500 $2,044,500 1,533,000 $ 511,500 $1,441,000 $1,077,500 511,500 (148,000) $1441.000 2,346,000 $2,254,000 1,598,000 $ 656,000 656,000 (157,000) $1,940,000