Save Answer PEF is preparing its 2015 financial statements. Before taking into account the following information, income from continuing ope tations before tax for 2015 was determined to be $450,000. DEF has a corporate tax rate of 30%. (1) DEF purchased equipment on January1,2013 for $30,000 and correctly accounted for the purchase. The firm estimated that the machine would be used for 5 years with a salvage value of $5,000. However, in calculating the depreciation using the straight-line method, the firm used a cost of $20,000 instead of $30,000 by mistake. (2) On March 31, 2015, DEF experienced a fire in one of its warehouses. This resulted in a pre-tax loss of $6,000. (Note the fire did not qualify for a discontinued operation). (3) The firm had retained earnings of $220,000 on its 12/31/2014 balance sheet. In 2015, the firm declared $20,000 dividend. Required: (1) Prepare the income Statement starting from Pre-tax Income from Continuing Operations; (2) Calculate the correct balance of retained earnings on the firm's 12/31/2015 balance sheet