(Learning Objective 3: Reporting a prior period adjustment) iFlash, Inc., was set to report the following statement of retained earnings for the year ended December 31, 20X1.
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iFlash, Inc. Statement of Retained Earnings Year Ended December 31, 20X1 |
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Retained earnings, December 31, 20X0 |
$140,000 |
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Net income for 20X1 |
91,000 |
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Dividends for 20X1 |
(14,000) |
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Retained earnings, December 31, 20X1 |
$217,000 |
Before issuing its 20X1 financial statements, iFlash learned that net income of 20X0 was overstated by $16,000. Prepare iFlash’s 20X1 statement of retained earnings to show the correction of the error—that is, the prior period adjustment.