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Required: if the 25% income tax didn't change during the vears: 1) Calculated the adjusted income for the year ended 31/12/2020 2) prepare the retained earnings statement for the ended 31/12/2020 3) Journalize any entry required for the adjustment

Required: if the 25% income tax didn't change during the vears: 1) Calculated the adjusted income for the year ended 31/12/2020 2) prepare the retained earnings statement for the ended 31/12/2020 3) Journalize any entry required for the adjustment

FINANCIAL ACCOUNTING
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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Sows company established at January 2016 to produce foods and medicine for animals, the company purchased a heavy equipment for production which cost 1,200,000 with 10 years useful Jife and 100,000 salvage value, the company used doble declining method for depreciation and W.A for inventory. In 31/12/2019 the company changes its inventory method to FIFO, and its depreciation method to straight line; the following reported income before tax for the previous years income FIFO dividend paid 160,000 250,000 Year income at W.A 2016 370,000 390,000 410,000 395,000 2017 420,000 2018 300,000 380,000 320,000 2019 280,000 200,000 The differences in income just related for change in inventory method, income for 2020 under FIFO before tax was $150,000 after deductible 98304 depreciation expenses at doble declining method, the company declared $45,000 cash dividend and $50,000 share dividend. The accumulated depreciation at 31/12/2020 S806,784. Required: if the 25% income tax didn't change during the years: 1) Calculated the adjusted income for the vear ended 31/12/2020 2) prepare the retained earnings statement for the ended 31/12/2020 3) Journalize any entry required for the adjustment
Transcribed Image Text:Sows company established at January 2016 to produce foods and medicine for animals, the company purchased a heavy equipment for production which cost 1,200,000 with 10 years useful Jife and 100,000 salvage value, the company used doble declining method for depreciation and W.A for inventory. In 31/12/2019 the company changes its inventory method to FIFO, and its depreciation method to straight line; the following reported income before tax for the previous years income FIFO dividend paid 160,000 250,000 Year income at W.A 2016 370,000 390,000 410,000 395,000 2017 420,000 2018 300,000 380,000 320,000 2019 280,000 200,000 The differences in income just related for change in inventory method, income for 2020 under FIFO before tax was $150,000 after deductible 98304 depreciation expenses at doble declining method, the company declared $45,000 cash dividend and $50,000 share dividend. The accumulated depreciation at 31/12/2020 S806,784. Required: if the 25% income tax didn't change during the years: 1) Calculated the adjusted income for the vear ended 31/12/2020 2) prepare the retained earnings statement for the ended 31/12/2020 3) Journalize any entry required for the adjustment
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