Prepare the retained earnings portion of ketting co

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Question - Ketting Co., a public company, reported the following reconciliation of retained earnings on its draft statement of changes in shareholders' equity for the year ended December 31, 2021: 2021 2020 Retained earnings, January 1 $18,400 $15,000 Net income 3,600 3,400 Dividends (100) 0 Retained earnings, December 31 $21,900 $18,400 After the draft 2021 financial statements were prepared, the following errors were discovered: 1. Dividends of $60 declared in 2021 were recorded as an expense. 2. Ending inventory in 2020 was overstated by $70. 3. The bookkeeper failed to include a residual value of $10,000 in the calculation of a machine's depreciation expense for both 2020 and 2021. The life of the machine was 10 years, and it was purchased on January 2, 2020. Ketting Co. uses the straight-line method for depreciation.

Required - Prepare the retained earnings portion of Ketting Co.'s statement of changes in shareholders' equity for the year ended December 31, 2021. Ignore income taxes.

Reference no: EM133167114

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