Please do not give image format The following additional information is provided:1.2.In 2021, Pearl Inc. decided to switch its depreciation method from sum-of-the-years' digits to the straight-line method. Theassets were purchased at the beginning of 2020 for $95,000 with an estimated useful life of 4 years and no salvage value.(The 2021 income statement contains depreciation expense of $28,500 on the assets purchased at the beginning of 2020.)In 2021, the company discovered that the ending inventory for 2020 was overstated by $22,800; ending inventory for 2021 iscorrectly stated.Prepare the revised retained earnings statement for 2020 and 2021, assuming comparative statements. (Ignore income taxes.)Show Transcribed TextPEARL INC.Retained Earnings StatementFor the Year Ended$LA2021$2020 Presented below are the comparative income and retained earnings statements for Pearl Inc. for the years 2020 and 2021.SalesCost of salesGross profitExpensesNet incomeRetained earnings (Jan. 1)Net incomeDividendsRetained earnings (Dec. 31)2021$328,000212,000116,00087,100$28,900$101,90028,900(31,300 )$99,5002020$255,000151,000104,00050,700$53,300$75,70053,300(27,100 )$101,900

A change in accounting methods like inventory valuation and depreciation expense computation is…

Presented below are the comparative income and retained earnings statements for Pearl 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) 2021 $328,000 212,000 116,000 87,100 $28,900 $101,900 28,900 (31,300 ) $99,500 2020 $255,000 151,000 104,000 50,700 $53,300 $75,700 53,300 (27,100 ) $101,900

Presented below are the comparative income and retained earnings statements for Pearl 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) 2021 $328,000 212,000 116,000 87,100 $28,900 $101,900 28,900 (31,300 ) $99,500 2020 $255,000 151,000 104,000 50,700 $53,300 $75,700 53,300 (27,100 ) $101,900

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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