(Learning Objective 5: Report a prior-period adjustment on the statement of retained earnings)…

(Learning Objective 5: Report a prior-period adjustment on the statement of retained earnings) Bright House, Inc., a household products chain, reported a prior-period adjustment in 2014. An accounting error caused net income of 2013 to be overstated by $13 million. Retained earnings at December 31, 2013, as previously reported, was $418 million. Net income for 2014 was $88 million, and 2014 dividends declared were $41 million.