ANSWERS TO QUESTIONS
Retained earnings, July 1, 2006, as reported $337,000 Correction of depreciation understatement (net of tax) 17,700 Retained earnings, July 1, 2006 as adjusted $319,300 Add: Net income 290,525 609,825 Less: Dividends declared on preferred stock 9,000 Dividends declared on common stock 32,000 41,000 Retained earnings, June 30, 2007 $568,825 ................
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