Crane Corporation began operations on January 1, 2022. During its first 3 years of operations, Crane reported net income ar declared dividends as follows: 2022 2023 2024 Net income Dividends declared. $-0- $191,000 522,000 671,000 226,000 Income before income tax 226,000 The following information relates to 2025. Prior period adjustment: understatement of 2023 depreciation expense (before taxes) Cumulative decrease in income from change in inventory methods (hefore taxes) $993,000 $115,000 $172.000
Crane Corporation began operations on January 1, 2022. During its first 3 years of operations, Crane reported net income ar declared dividends as follows: 2022 2023 2024 Net income Dividends declared. $-0- $191,000 522,000 671,000 226,000 Income before income tax 226,000 The following information relates to 2025. Prior period adjustment: understatement of 2023 depreciation expense (before taxes) Cumulative decrease in income from change in inventory methods (hefore taxes) $993,000 $115,000 $172.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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subject-Accounting
Transcribed Image Text:(a)
Prepare a 2025 retained earnings statement for Crane Corporation. (List items that increase adjusted retained earnings first.)
CRANE CORPORATION
Retained Earnings Statement
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$
Transcribed Image Text:Crane Corporation began operations on January 1, 2022. During its first 3 years of operations, Crane reported net income and
declared dividends as follows:
2022
2023
2024
Net income Dividends declared
$-0-
$191,000
522,000
671,000
226,000
226,000
The following information relates to 2025.
Effective tax rate
A
Income before income tax
Prior period adjustment: understatement of 2023 depreciation expense (before taxes)
Cumulative decrease in income from change in inventory methods (before taxes)
Dividends declared (of this amount, $115,000 will be paid on Jan. 15, 2026)
$993,000
$115,000
$172,000
$452,000
20 %
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