Everdeen Inc. had common stock of $2,300,000 and retained earnings of $865,000 at January 1, 20Y7. During 20Y7, Everdeen reported the following:

The company discovered that net income for 20Y6 was overstated by $28,000 due to an error in computing depreciation expense.
a.  Journalize the entry necessary to correct the error.
b. Prepare a statement of stockholders’ equity for Everdeen Inc. for the year ended December 31, 20Y7.

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Net income $430,000 Cash dividends declared and paid 24,000 Common stock issued 35,000