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 life and 100,000 salvage value, the company used doble declining method for depreciati and WA for inventory. In 31/12/2019 the company changes its inventc method to FIFO, and its depreciation method to straight line, the Following reported income before tax for the previous years Year income at WA 370,000 390,000 410,000 280,000 income FIFO dividend paid 395,000 420,000 380,000 320,000 2016 160,000 250,000 300,000 200,000 2017 2018 2019

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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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 life 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 bef ore tax for the previous years
Year
2016
2017
2018
2019
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 $806,784.
income at W.A
370,000
390,000
410,000
280,000
income FIFO dividend paid
395,000
420,000
380,000
320,000
160,000
250,000
300,000
200,000
Required: if the 25% income tax didn't change during the years:
1) Calculated the adjusted income for the year ended 31/12/2020
2) prepare the retain ed 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 life 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 bef ore tax for the previous years Year 2016 2017 2018 2019 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 $806,784. income at W.A 370,000 390,000 410,000 280,000 income FIFO dividend paid 395,000 420,000 380,000 320,000 160,000 250,000 300,000 200,000 Required: if the 25% income tax didn't change during the years: 1) Calculated the adjusted income for the year ended 31/12/2020 2) prepare the retain ed earnings statement for the ended 31/12/2020 3) Journalize any entry required for the adjustment
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