The following information is available for Reynolds Corporation: Retained Earnings, December 31, 2020 $1,500,000 Profit for the year ended December 31, 2021 250,000 The company accountant, in preparing financial statements for the year ending December 31, 2021, has discovered the following information: The company's previous bookkeeper, who has been fired, had recorded depreciation expense on a machine in 2019 and 2020 using the double diminishing-balance method of depreciation. The bookkeeper neglected to use the straight-line method of depreciation which is the company's policy. The cumulative effect of the error on prior years was $9,000. Depreciation was calculated by the straight-line method in 2021. Reynolds' average tax rate is 22%. During 2021, Reynolds declared and paid cash dividends of $80,000. Instructions a)Calculate the impact on retained earnings. b)Prepare the statement of retained earnings for 2021. Please don't provide solution in an image format thank you
The following information is available for Reynolds Corporation:
| Retained Earnings, December 31, 2020 | $1,500,000 |
| Profit for the year ended December 31, 2021 | 250,000 |
The company accountant, in preparing financial statements for the year ending December 31, 2021, has discovered the following information:
The company's previous bookkeeper, who has been fired, had recorded
Instructions
a)Calculate the impact on retained earnings.
b)Prepare the statement of retained earnings for 2021.
Please don't provide solution in an image format thank you
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