Tigress Manufacturing had beginning retained earnings of $650,000. During the year, Tigress paid cash dividends of $70,000 to preferred stockholders and $55,000 to common stockholders. Net income for the year was $340,000.
Required:
1. Reproduce the Retained Earnings T-account for the year starting with the beginning balance.
2. Determine what Tigress's ending retained earnings is assuming that during the year it discovers that net income was overstated by $13,000 in prior years due to an error. The error was corrected and the current year's net income is correct?