Oriole Corporation, a private company, began operations on January 1, 2020. During its first three years of operations, Oriole reported net income and declared dividends as follows: 2020 2021 2022 Net income $54,000 136,000 160,000 Dividends declared $0 50,000 50,000 The following information is for 2023: Income before income tax Correction of prior period error: understatement of 2021 depreciation expense (before tax) Cumulative increase in prior years' income from change in inventory method (before tax) Dividends declared (of this amount, $25,000 will be paid on January 15, 2024) Effective tax rate $360,000 39,000 49,000 100,000 40% Prepare a 2023 statement of retained earnings for Oriole. The company follows ASPE. (List items that increase retained earnings first after adjusted balance. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45).)

Oriole Corporation, a private company, began operations on January 1, 2020. During its first three years of operations, Oriole reported net income and declared dividends as follows: 2020 2021 2022 Net income $54,000 136,000 160,000 Dividends declared $0 50,000 50,000 The following information is for 2023: Income before income tax Correction of prior period error: understatement of 2021 depreciation expense (before tax) Cumulative increase in prior years' income from change in inventory method (before tax) Dividends declared (of this amount, $25,000 will be paid on January 15, 2024) Effective tax rate $360,000 39,000 49,000 100,000 40% Prepare a 2023 statement of retained earnings for Oriole. The company follows ASPE. (List items that increase retained earnings first after adjusted balance. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45).)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

Oriole Corporation
Statement of Retained Earnings
:
*
:
#
1000
$

Oriole Corporation, a private company, began operations on January 1, 2020. During its first three years of operations, Oriole
reported net income and declared dividends as follows:
2020
2021
2022
Net income
$54,000
136,000
160,000
Dividends
declared
$0
50,000
50,000
The following information is for 2023:
Income before income tax
Correction of prior period error: understatement of 2021 depreciation expense (before tax)
Cumulative increase in prior years' income from change in inventory method (before tax)
Dividends declared (of this amount, $25,000 will be paid on January 15, 2024)
Effective tax rate
$360,000
39,000
49,000
100,000
40%
Prepare a 2023 statement of retained earnings for Oriole. The company follows ASPE. (List items that increase retained earnings
first after adjusted balance. Enter negative amounts using either a negative sign preceding the number e.g.-45 or
parentheses e.g. (45).)

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