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(Retained Earnings Statement) McEntire Corporation began operations on January 1, 2007. During its first 3 years of operations, McEntire reported net income and declared dividends as follows. Net income Dividends declared 2007 $40,000 $ -0- 2008 125,000 50,000 2009 160,000 50,000 The following information relates to 2010. Income before income tax $220,000 Prior period adjustment: understatement of 2008 depreciation expense (before taxes) $ 25,000 Cumulative decrease in income from change in inventory methods (before taxes) $ 45,000 Dividends declared (of this amount, $25,000 will be paid on Jan. 15, 2011) $100,000 Effective tax rate 40% (a) Prepare a 2010 retained earnings statement for McEntire Corporation. (Enter all amounts as positive amounts and subtract where necessary.)

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