Current Attempt in Progress

Below is the Retained Earnings account for the year $2025$ for Waterway Corp.

Retained earnings, January $1,2025$

$$261,300$

Add:

Galn on sale of investments $($net of tax$)$

Net income

Refund on litgation with government, related to the year $2022($net of tax$)$

Recognition of income earned in $2024,$ but omitted from income statement in that year $($net of tax$)$

$$44,900$

$88,200$

$25,300$

$29\mathrm{.}100$

$187,500$

$448,800$

Deduct:

Loss on discontinued operations $($net of tax$)$

Write$-$off of goodwill $($net of tax$)$

Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in $2025($net of tax$)$

Cash dividends declared

$38,700$

$63,700$

$26,900$

$35\mathrm{.}700$

$165,000$

$$283800$

Retained earnings, December $31,2025$

$($a$)$ Prepare a corrected retained earnings statement. Waterway Corp. normally sells investments of the typ$.$ inventory was used in $2025$ to compute net income. $[$List illems that horease adjusted retained earnings first$]$

WATERWAY CONP.

Retained Earnings Statement

December $31,2025$

Retained Earnings, January $1.$ as Adjusted

Correction of Error From Prior Period

Retained Gernings, Januery $1,21$ Affusted

$$ :

Cush Dividends Decured

RetuirwdEunires, December $31$

$5$

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