Presented below are the comparative income and retained earnings statements for Crane Inc. for the years 2020 and 2 Sales Cost of sales Gross profit Expenses Net income Retained earnings (Jan. 1)) Net income Dividends Retained earnings (Dec. 31) 1. 2021 2. $373,000 193,000 180,000 94,600 $85,400 $111,700 85,400 (32,800) $164,300 2020 $246,000 135,000 111,000 46,300 $64,700 $72,000 64,700 (25,000) The following additional information is provided: In 2021, Crane Inc. decided to switch its depreciation method from sum-of-the-years' digits to the straight-line method. The assets were purchased at the beginning of 2020 for $92,500 with an estimated useful life of 4 years and no salvage value. (The 2021 income statement contains depreciation expense of $27,750 on the assets purchased at the beginning of 2020.) $111,700 In 2021, the company discovered that the ending inventory for 2020 was overstated by $23,400; ending inventory for 2021 is correctly stated. Prepare the revised retained earnings statement for 2020 and 2021, assuming comparative statements. (Ignore income taxes.)
Presented below are the comparative income and retained earnings statements for Crane Inc. for the years 2020 and 2 Sales Cost of sales Gross profit Expenses Net income Retained earnings (Jan. 1)) Net income Dividends Retained earnings (Dec. 31) 1. 2021 2. $373,000 193,000 180,000 94,600 $85,400 $111,700 85,400 (32,800) $164,300 2020 $246,000 135,000 111,000 46,300 $64,700 $72,000 64,700 (25,000) The following additional information is provided: In 2021, Crane Inc. decided to switch its depreciation method from sum-of-the-years' digits to the straight-line method. The assets were purchased at the beginning of 2020 for $92,500 with an estimated useful life of 4 years and no salvage value. (The 2021 income statement contains depreciation expense of $27,750 on the assets purchased at the beginning of 2020.) $111,700 In 2021, the company discovered that the ending inventory for 2020 was overstated by $23,400; ending inventory for 2021 is correctly stated. Prepare the revised retained earnings statement for 2020 and 2021, assuming comparative statements. (Ignore income taxes.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Presented below are the comparative income and retained earnings statements for Crane Inc. for the years 2020 and 2021.
Sales
Cost of sales
Gross profit
Expenses
Net income
Retained earnings (Jan. 1)
Net income
Dividends
Retained earnings (Dec. 31)
1.
2021
$373,000
193,000
180,000
V
94,600
$85,400
$111,700
85,400
(32,800)
The following additional information is provided:
$164,300
2020
$246,000
135,000
111,000
46,300
$64.700
$72,000
64,700
(25,000)
$111,700
In 2021, Crane Inc. decided to switch its depreciation method from sum-of-the-years' digits to the straight-line method. The
assets were purchased at the beginning of 2020 for $92,500 with an estimated useful life of 4 years and no salvage value.
(The 2021 income statement contains depreciation expense of $27,750 on the assets purchased at the beginning of 2020.)
2. In 2021, the company discovered that the ending inventory for 2020 was overstated by $23,400; ending inventory for 2021 is
correctly stated.
Prepare the revised retained earnings statement for 2020 and 2021, assuming comparative statements. (Ignore income taxes.)
CRANE INC.
Retained Earnings Statement
For the Year Ended
2021
CRANE INC.
Retained Earnings Statement
For the Year Ended
$
2021
$
2020
2020
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