FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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 |
| 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
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