How much is the restated balance of AMSTERDAM's retained earnings account at January 1, 2021? The following pre-tax amounts pertaining to AMSTERDAM Company for the year ended December 31, 2021:• Sales, P400,000• Selling and adminstrative expenses, P84,000• Other income, P40,000• Interest expense, P4,000• Cost of goods sold, P280,000• Oorrection of prior period error - credit, P16,000• Post-tax results of discontinued operations - credit, P40,000• Cumulative effect of change in accounting policy - debit, P24,000• Retained earnings, January 1, 2021 (not yet restated), P1,600,000• Dividends declared, P12,000• Income tax rate is 30%

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Description: How much is the restated balance of AMSTERDAM's retained earnings account at January 1, 2021? The following pre-tax amounts pertaining to AMSTERDAM Company for the year ended December 31, 2021:• Sales, P400,000• Selling and adminstrative expenses, P8

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How much is the restated balance of AMSTERDAM's retained earnings account at January 1, 2021?

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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Concept explainers

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

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How much is the restated balance of AMSTERDAM's retained earnings account at January 1, 2021?

The following pre-tax amounts pertaining to AMSTERDAM Company for the year ended December 31, 2021:
• Sales, P400,000
• Selling and adminstrative expenses, P84,000
• Other income, P40,000
• Interest expense, P4,000
• Cost of goods sold, P280,000
• Oorrection of prior period error - credit, P16,000
• Post-tax results of discontinued operations - credit, P40,000
• Cumulative effect of change in accounting policy - debit, P24,000
• Retained earnings, January 1, 2021 (not yet restated), P1,600,000
• Dividends declared, P12,000
• Income tax rate is 30%

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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Step 1: Define Retained Earnings

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Step 2: Computation of the Net profit after tax as on December 31, 2021:

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Step 3: Computation of the balance of retained earnings as on December 31, 2021:

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