In 20X6, Dalia Corp., a calendar fiscal-year company, discovered that depreciation expense was erroneously overstated $58,000 in both 20X4 and 20X5 for financial reporting purposes. Net income in 20X6 is correct. The tax rate is 30%. The error was made only for financial reporting, affecting depreciation and deferred income tax accounts. CCA had been recorded correctly, and thus there will be no change in taxes payable. Additional information: 20X6 S Beginning retained earnings $446,000 20X5 $424,100 Earnings (includes error in 20x5) Dividends declared 83,800 61,300 94,200 2,300 Required: 1. Record the entry in 20X6 to correct the error. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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In 20X6, Dalia Corp., a calendar fiscal-year company, discovered that depreciation expense was erroneously overstated $58,000
in both 20X4 and 20X5 for financial reporting purposes. Net income in 20X6 is correct. The tax rate is 30%. The error was made
only for financial reporting, affecting depreciation and deferred income tax accounts. CCA had been recorded correctly, and thus
there will be no change in taxes payable.
Additional information:
20X6
S
Beginning retained earnings
$446,000
20X5
$424,100
Earnings (includes error in 20x5)
Dividends declared
83,800
61,300
94,200
2,300
Required:
1. Record the entry in 20X6 to correct the error. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field.)
Transcribed Image Text:In 20X6, Dalia Corp., a calendar fiscal-year company, discovered that depreciation expense was erroneously overstated $58,000 in both 20X4 and 20X5 for financial reporting purposes. Net income in 20X6 is correct. The tax rate is 30%. The error was made only for financial reporting, affecting depreciation and deferred income tax accounts. CCA had been recorded correctly, and thus there will be no change in taxes payable. Additional information: 20X6 S Beginning retained earnings $446,000 20X5 $424,100 Earnings (includes error in 20x5) Dividends declared 83,800 61,300 94,200 2,300 Required: 1. Record the entry in 20X6 to correct the error. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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