Sunland Corporation, a private company, began operations on January 1, 2020. During its first three years of operations, Sunland reported net income and declared dividends as follows:
Sunland Corporation, a private company, began operations on January 1, 2020. During its first three years of operations, Sunland reported net income and declared dividends as follows:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sunland Corporation, a private company, began operations on January 1, 2020. During its first three years of operations, Sunland
reported net income and declared dividends as follows:
2020
2021
2022
Net income
$60,000
135,000
161,000
Income before income tax
Dividends declared
$0
50,000
The following information is for 2023:
Effective tax rate
50,000
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)
$360,000
45,000
55,000
100,000
40%
Prepare a 2023 statement of retained earnings for Sunland. The company follows ASPE. (List items that increase retained earnings first
after adjusted balance.)
Transcribed Image Text:Prepare a 2023 statement of retained earnings for Sunland. The company follows ASPE. (List items that increase retained earnings first
after adjusted balance.)
V:
7:
Sunland Corporation
Statement of Retained Earnings
LA
$
Expert Solution
Step 1
Retained earnings are the earnings of the company which have been accumulated over a period of time. The ending retained earnings are calculated by adding the opening retained earnings and net income and deducting the dividend declared.
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