Below is the Retained Earnings account for the year 2020 for Acadian Corp. Retained earnings, January 1, 2020 $257,600 Add: Gain on sale of investments (net of tax) $41,200 Net income 84,500 Refund on litigation with government, related to the year 2017 (net of tax) 21,600 Recognition of income earned in 2019, but omitted from income statement in that year (net of tax) 25,400 172,700 430,300 Deduct: Loss on discontinued operations (net of tax) 35,000 Write-off of goodwill (net of tax) 60,000 Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in 2020 (net of tax) 23,200 Cash dividends declared 32,000 150,200 Retained earnings, December 31, 2020 $280,100 Instructions a. Prepare a corrected retained earnings statement. Acadian Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2020 to compute net income. b. State where the items that do not appear in the corrected retained earnings statement should be shown.
Below is the Retained Earnings account for the year 2020 for Acadian Corp. Retained earnings, January 1, 2020 $257,600 Add: Gain on sale of investments (net of tax) $41,200 Net income 84,500 Refund on litigation with government, related to the year 2017 (net of tax) 21,600 Recognition of income earned in 2019, but omitted from income statement in that year (net of tax) 25,400 172,700 430,300 Deduct: Loss on discontinued operations (net of tax) 35,000 Write-off of goodwill (net of tax) 60,000 Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in 2020 (net of tax) 23,200 Cash dividends declared 32,000 150,200 Retained earnings, December 31, 2020 $280,100 Instructions a. Prepare a corrected retained earnings statement. Acadian Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2020 to compute net income. b. State where the items that do not appear in the corrected retained earnings statement should be shown.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...
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Below is the
| Retained earnings, January 1, 2020 | $257,600 | |||
| Add: | ||||
| Gain on sale of investments (net of tax) | $41,200 | |||
| Net income | 84,500 | |||
| Refund on litigation with government, related to the year 2017 (net of tax) | 21,600 | |||
| Recognition of income earned in 2019, but omitted from income statement in that year (net of tax) | 25,400 | 172,700 | ||
| 430,300 | ||||
| Deduct: | ||||
| Loss on discontinued operations (net of tax) | 35,000 | |||
| Write-off of |
60,000 | |||
| Cumulative effect on income of prior years in changing from LIFO to FIFO |
23,200 | |||
| Cash dividends declared | 32,000 | 150,200 | ||
| Retained earnings, December 31, 2020 | $280,100 |
Instructions
a. Prepare a corrected retained earnings statement. Acadian Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2020 to compute net income.
b. State where the items that do not appear in the corrected retained earnings statement should be shown.
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