At January 1, 2007, Horse Corporation reported retained earnings of $2,000,000. In 2007 Horse discovered that 2006 depreciation expense was inderstated by $500,000. In 2007, net income was $900,000 and dividends declared were $250,000. The tax rate os 40%. PRepare a 2007 retained earning statement.
The solution explains how to prepare a retained earnings statement incorporating an error correction.