Coronado Corporation, a private company, began operations on January 1, 2020. During its first three years of operations, Coronadoreported net income and declared dividends as follows:202020212022Net income.$56,000134,000159,000Dividends declared$050,00050.000The following information is for 2023:Income before income tax.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)Effective tax rate$350,00041.00051.000100,00040%Prepare a 2023 statement of retained earnings for Coronado. The company follows ASPE. (List items that increase retained earnings firstafter adjusted balance. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg.(45)) Balance, January 1, as reportedCorrection for Depreciation Error Net of Income TaxRetroactive Adjustment for Change in inventory Method Net of Income TaxBalance, January 1, as adjustedAddLessNet Income /(Loss)Coronado CorporationStatement of Retained EarningsFor the Year Ended December 31, 2023Dividends DeclaredBalance, December 31Y2490002460030600193800210000403800100000 i303800

Retained earnings play a vital role in a company's financial health and stability. They serve as a…

The following information is for 2023: Income before income tax Correction of prior period error: understatement of 2021 d Cumulative increase in prior years' income from change in in Dividends declared (of this amount, $25,000 will be paid on Effective tax rate

The following information is for 2023: Income before income tax Correction of prior period error: understatement of 2021 d Cumulative increase in prior years' income from change in in Dividends declared (of this amount, $25,000 will be paid on Effective tax rate

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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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

Coronado Corporation, a private company, began operations on January 1, 2020. During its first three years of operations, Coronado
reported net income and declared dividends as follows:
2020
2021
2022
Net income.
$56,000
134,000
159,000
Dividends declared
$0
50,000
50.000
The following information is for 2023:
Income before income tax.
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)
Effective tax rate
$350,000
41.000
51.000
100,000
40%
Prepare a 2023 statement of retained earnings for Coronado. The company follows ASPE. (List items that increase retained earnings first
after adjusted balance. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg.(45))

Balance, January 1, as reported
Correction for Depreciation Error Net of Income Tax
Retroactive Adjustment for Change in inventory Method Net of Income Tax
Balance, January 1, as adjusted
Add
Less
Net Income /(Loss)
Coronado Corporation
Statement of Retained Earnings
For the Year Ended December 31, 2023
Dividends Declared
Balance, December 31
Y
249000
24600
30600
193800
210000
403800
100000 i
303800

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