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Blue Corporation began operations on January 1, 2022. During its first 3 years of operations, Blue reported net income and declared dividends as follows. Net income $48,800 152,500 2024 195,200 2022 2023 Dividends declared $-0- 61,000 61,000 The following information relates to 2025. Income before income tax Prior period adjustment: understatement of 2023 depreciation expense (before taxes) Dividends declared (of this amount, $30,500 will be paid on Jan. 15, 2026) Effective tax rate $292,800 30,500 122,000 20%

Blue Corporation began operations on January 1, 2022. During its first 3 years of operations, Blue reported net income and declared dividends as follows. Net income $48,800 152,500 2024 195,200 2022 2023 Dividends declared $-0- 61,000 61,000 The following information relates to 2025. Income before income tax Prior period adjustment: understatement of 2023 depreciation expense (before taxes) Dividends declared (of this amount, $30,500 will be paid on Jan. 15, 2026) Effective tax rate $292,800 30,500 122,000 20%

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Blue Corporation began operations on January 1, 2022. During its first 3 years of operations, Blue reported net income and declared dividends as follows. 2022 2023 2024 Net income $48,800 152,500 195,200 Dividends declared $-0- Effective tax rate 61,000 61,000 The following information relates to 2025. Income before income tax Prior period adjustment: understatement of 2023 depreciation expense (before taxes) Dividends declared (of this amount, $30,500 will be paid on Jan. 15, 2026) $292,800 30,500 122,000 20%
Transcribed Image Text:Blue Corporation began operations on January 1, 2022. During its first 3 years of operations, Blue reported net income and declared dividends as follows. 2022 2023 2024 Net income $48,800 152,500 195,200 Dividends declared $-0- Effective tax rate 61,000 61,000 The following information relates to 2025. Income before income tax Prior period adjustment: understatement of 2023 depreciation expense (before taxes) Dividends declared (of this amount, $30,500 will be paid on Jan. 15, 2026) $292,800 30,500 122,000 20%
BLUE CORPORATION Retained Earnings Statement December 31, 2025
Transcribed Image Text:BLUE CORPORATION Retained Earnings Statement December 31, 2025
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