On January 1, 2014, Fyre Lite Corporation had retained earnings of $650,000. During the year, Fyre Lite had the following selected transactions:

1. Declared and paid cash dividends, $245,000.

2. Earned profi t before income tax, $750,000.

3. Corrected a prior period error of $85,000, before income tax, which resulted in an understatement of profit in 2013.

4. Reacquired 25,000 common shares for $50,000 more than the original issue price. Th is was the first time the company had ever reacquired its own shares.

5. Completed a 3-for-1 stock split of the common shares. Fyre Lite has a 25% income tax rate and reports under ASPE.

Instructions

(a) Prepare a statement of retained earnings for the year ended December 31, 2014.

(b) If any of the above items are not included in this statement, indicate their presentation.