The following information is from Amos Company for the current year ended December 31. a. Retained earnings at December 31 of the prior year (before discovery of an error) was $861,000. b. Amos discovered this year that it forgot to record depreciation expense of $51,600 (net of tax benefit) two years ago. c. Cash dividends declared and paid in the current year were $25,000. d. Reported $223,000 of net income in the current year. Prepare a statement of retained earnings for Amos Company for the current year. Note: Amounts to be deducted should be indicated with a minus sign. Prior period adjustment AMOS COMPANY Statement of Retained Earnings For Current Year Ended December 31

The following information is from Amos Company for the current year ended December 31. a. Retained earnings at December 31 of the prior year (before discovery of an error) was $861,000. b. Amos discovered this year that it forgot to record depreciation expense of $51,600 (net of tax benefit) two years ago. c. Cash dividends declared and paid in the current year were $25,000. d. Reported $223,000 of net income in the current year. Prepare a statement of retained earnings for Amos Company for the current year. Note: Amounts to be deducted should be indicated with a minus sign. Prior period adjustment AMOS COMPANY Statement of Retained Earnings For Current Year Ended December 31

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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12. The following incorrect income statement was prepared by the accountant of the Axel Corporation: AXEL CORPORATIONIncome StatementFor the Year Ended December 31, 2021 Revenues and gains: Sales revenue $ 790,000 Interest revenue 52,000 Gain on sale of investments 99,000 Total revenues and gains 941,000 Expenses and losses: Cost of goods sold $ 425,000 Selling expense 79,000 Administrative expense 99,000 Interest expense 36,000 Restructuring costs 75,000 Income tax expense 56,750 Total expenses and losses 770,750 Net Income $ 170,250 Earnings per share $ 1.70 Required:Prepare a multiple-step income statement for 2021 applying generally accepted accounting principles. The income tax rate is 25%. (Amounts to be deducted should be indicated with a minus sign. Round EPS answer to 2 decimal places.)
The following is information for Novak Corp. for the year ended December 31, 2020: Sales revenue $1,420,000 Loss on inventory due to decline in net realizable value $70,000 Unrealized gain on FV-OCI equity investments 46,000 Loss on disposal of equipment 45,000 Interest income 9,000 Depreciation expense related to buildings omitted by mistake in 2019 56,000 Cost of goods sold 852,000 Retained earnings at December 31, 2019 950,000 Selling expenses 71,000 Loss from expropriation of land 57,000 Administrative expenses 52,000 Dividends declared 46,000 Dividend revenue 15,000 The effective tax rate is 25% on all items. Novak prepares financial statements in accordance with IFRS. The FV-OCI equity investments trade on the stock exchange. Gains/losses on FV-OCI investments are not recycled through net income. a)Prepare the retained earnings section of the statement of changes in equity for 2020. (List…
Company X failed to record (accrue) $5,000,000 of vendor invoices and warranty liability at year-end. As a result of this omission, the company's summary financial statements were stated as follows: Summarized Income Statement Sales $50,000,000 All Cost (incl. Interest & Taxes) $40,000,000 Net Income $10,000,000 Summarized Balance Sheet This Year Last Year Assets: All Current Assets combined $50,000,000 $40,000,000 All Long-Term Assets combined $50,000,000 $40,000,000 Total Assets: $100,000,000 $80,000,000 Liabilities & Stockholders Equity All Current Liabilities combined $30,000,000 $25,000,000 All Long-Term Liabilities combined $25,000,000 $20,000,000 Stockholders Equity $45,000,000 $35,000,000 Total…
On June 30, Pronghorn Corp discontinued its operations in Mexico. During the year, the operating income was $270,000 before taxes. On September 1, Pronghorn disposed of the Mexico facility at a pretax loss of $670,000. The applicable tax rate is 30%. Show the discontinued operations section of Pronghorn’s income statement. PRONGHORN CORPPartial Income Statement select an opening section name enter an income statement item $enter a dollar amount enter an income statement item $enter a dollar amount $enter a total dollar amount
Zaire Company had a $26,000 net loss from operations. Depreciation expense for the year was $9,600, and a dividend of $2,000 was declared and paid. The balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End Beginning Cash $3,500 $7,000 Accounts receivable 16,000 27,000 Inventory 51,000 53,000 Prepaid expenses 5,000 9,000 Accounts payable 12,000 8,000 Accrued liabilities 6,000 7,600 Did Zaire Company’s operating activities provide or use cash? Use the indirect method to determine your answer. Use negative signs with cash outflow answers and to indicate operating activities used cash, if applicable.
Following particulars have been obtained from the accounts of a company.i) Remuneration of Managing Director 20,000ii) Provision for Bad debts 10,000iii)Provision for taxation 1,50,000iv) Depreciation written off 80,000v) Loss on sale of investments 70,000vi) Depreciation allowable according to Income-Tax Provisions 70,000vii) Net profit after considering the above items 4,50,000Calculate remuneration of Managing Director at 5% of net profit. The net profit should be as per provisions of Companies Act.
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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
Bananas, Inc. is a calendar-year corporation. Its financial statements for the years ended December 31, 2019 and 2020 contained the following errors: Ending Inventory Depreciation expense 2019 $25,000 overstatement 10,000 understatement 2020 $40,000 understatement 20,000 overstatement Assume that no correcting entries were made in 2019 or 2020 and that no errors existed in 2018. Ignoring income taxes, by how much will retained earnings at December 31, 2020 be overstated or understated? Enter an overstatement as a positive number and an understatement as a negative number.
During an audit of Madison Company’s December 31, 2020 records it was discovered that the company did not accurately accrue for $12,500 of depreciation expense. The accrual of interest expense of $4,500 was also omitted. These errors occurred in 2019 and have a material impact on Madison’s financial records. Madison’s net income for the year was $123,000. The company is subject to a 35% tax rate. The company had a retained earnings balance of $557,500 on January 1, 2020. No dividends were paid. Required: 1. Prepare the necessary journal entries to correct the accounting records of Madison Company’s books. 2. Prepare the statement of retained earnings for 2020. 1. Prepare the necessary journal entries to correct the accounting records of Madison Company’s books. For grading purposes, prepare four separate entries dated December 31. General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2…