Zambrano Corporation, a private company, began operations on January 1, 2020. During its first three years of operations, Zambrano reported net income and declared dividends as follows:

InstructionsPrepare a 2023 statement of retained earnings for Zambrano. The company follows ASPE.

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2020 2021 2022 Net income $ 40,000 125,000 160,000 The following information is for 2023: Dividends declared $ -0- 50,000 50,000 Income before income tax Correction of prior period error: understatement of 2021 depreciation expense (before tax) Cumulative increase in prior years' income from change in inventory method (before tax) Dividends declared (of this amount, $25,000 will be paid on January 15, 2024) Effective tax rate $240,000 25,000 35,000 100,000 40%