1. What is the adjustment of retained earnings on January 1, 2022?a. ₱ 230,000 credit b. ₱ 370,000 debit c. ₱ 230,000 debit d. ₱ 300,000 credit On January 31, 2022, RUBY Company agreed to pay the former president $300,000 under a deferredcompensation arrangement. RUBY should have recorded this expense in 2021 but did not do so. Theincome tax expense would have been $70,000 lower in 2021 had it properly accrued this deferredcompensation.

Name: 1. What is the adjustment of retained earnings on January 1, 2022?a.
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Description: 1. What is the adjustment of retained earnings on January 1, 2022?a. ₱ 230,000 credit b. ₱ 370,000 debit c. ₱ 230,000 debit d. ₱ 300,000 credit On January 31, 2022, RUBY Company agreed to pay the former president $300,000 under a deferredcompensatio

In the given question the company has not recorded compensation expense of P 300,000. Had this been…

Business

Accounting

On January 31, 2022, RUBY Company agreed to pay the former president P300,000 under a deferre compensation arrangement. RUBY should have recorded this expense in 2021 but did not do so. Th income tax expense would have been $70,000 lower in 2021 had it properly accrued this deferre compensation.

On January 31, 2022, RUBY Company agreed to pay the former president P300,000 under a deferre compensation arrangement. RUBY should have recorded this expense in 2021 but did not do so. Th income tax expense would have been $70,000 lower in 2021 had it properly accrued this deferre compensation.

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Chapter14: Taxes On The Financial Statements

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Problem 20CE

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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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1. What is the adjustment of retained earnings on January 1, 2022?

a. ₱ 230,000 credit

b. ₱ 370,000 debit

c. ₱ 230,000 debit

d. ₱ 300,000 credit

On January 31, 2022, RUBY Company agreed to pay the former president $300,000 under a deferred
compensation arrangement. RUBY should have recorded this expense in 2021 but did not do so. The
income tax expense would have been $70,000 lower in 2021 had it properly accrued this deferred
compensation.

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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