J. Mair has been employed as a bookkeeper at Problems

J. Mair has been employed as a bookkeeper at Problems Inc. for a number of years. With the assistance of a clerk, Mair handles all accounting duties, including the preparation of financial statements. The following is a statement of earned surplus prepared by Mair for 2011:

J. Mair has been employed as a bookkeeper at Problems

Instructions:
1. Prepare a schedule showing the correct net income for 2011. (Ignore income taxes.)
2. Prepare a retained earnings statement for 2011.
3. Explain why you have changed the retained earningsstatement.