Neilson Tool Corporation's December 31 year-end financial statements contained the following errors: Ending inventory Depreciation expense December 31, 2019 $11,600 overstated $3,500 overstated December 31, 2020 $8,700 understated An insurance premium of $51,000 covering the years 2019, 2020, and 2021 was prepaid in 2019, with the entire amount charged to expense that year. In addition, on December 31, 2020, fully depreciated machinery was sold for $15,400 cash, but the entry was not recorded until 2021. There were no other errors during 2019 or 2020, and no corrections have been made for any of the errors. Neilson follows ASPE. Answer the following, ignoring income tax considerations. Assume that the company has retained earnings on January 1, 2019 and 2020, of $1,264,000 and $1,639,500, respectively; net income for 2019 and 2020 of $438,000 and $387,000, respectively; and cash dividends declared for 2019 and 2020 of $62,500 and $41,000, respectively, before adjustment for the above items. Prepare a revised statement of retained earnings for 2019 and 2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Neilson Tool Corporation's December 31 year-end financial statements contained the following errors: Ending inventory Depreciation expense December 31, 2019 $11,600 overstated $3,500 overstated December 31, 2020 $8,700 understated An insurance premium of $51,000 covering the years 2019, 2020, and 2021 was prepaid in 2019, with the entire amount charged to expense that year. In addition, on December 31, 2020, fully depreciated machinery was sold for $15,400 cash, but the entry was not recorded until 2021. There were no other errors during 2019 or 2020, and no corrections have been made for any of the errors. Neilson follows ASPE. Answer the following, ignoring income tax considerations. Assume that the company has retained earnings on January 1, 2019 and 2020, of $1,264,000 and $1,639,500, respectively; net income for 2019 and 2020 of $438,000 and $387,000, respectively; and cash dividends declared for 2019 and 2020 of $62,500 and $41,000, respectively, before adjustment for the above items. Prepare a revised statement of retained earnings for 2019 and 2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A 105.
Transcribed Image Text:Neilson Tool Corporation's December 31 year-end financial statements contained the following errors:
Ending inventory
Depreciation expense
December 31, 2019
$11,600 overstated
$3,500 overstated
December 31, 2020
✓:[
$8,700
understated
An insurance premium of $51,000 covering the years 2019, 2020, and 2021 was prepaid in 2019, with the entire amount
charged to expense that year. In addition, on December 31, 2020, fully depreciated machinery was sold for $15,400 cash, but
the entry was not recorded until 2021. There were no other errors during 2019 or 2020, and no corrections have been made
for any of the errors. Neilson follows ASPE.
Answer the following, ignoring income tax considerations.
Assume that the company has retained earnings on January 1, 2019 and 2020, of $1,264,000 and $1,639,500, respectively; net
income for 2019 and 2020 of $438,000 and $387,000, respectively; and cash dividends declared for 2019 and 2020 of $62,500
and $41,000, respectively, before adjustment for the above items. Prepare a revised statement of retained earnings for 2019 and
2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
NEILSON TOOL CORPORATION
Statement of Retained Earnings
For the Years 2020 and 2019
$
$
2020
$
$
2019
(Restated)
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