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 $70,000Unrealized gain on FV-OCI equity investments 46,000 Loss on disposal of equipment 45,000Interest income 9,000 Depreciation expense related to buildings omitted by mistake in 2019 56,000Cost of goods sold 852,000 Retained earnings at December 31, 2019 950,000Selling expenses 71,000 Loss from expropriation of land 57,000Administrative expenses 52,000 Dividends declared 46,000Dividend 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 items that increase retained earnings first following the adjustment of prior years.)

Net Income - It the balance remain after deducting the amount earned by the company from the expense…

Answered: The following is information for Novak…

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 5RE: Bloom Company had beginning unadjusted retained earnings of 400,000 in the current year. At the...

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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 items that increase retained earnings first following the adjustment of prior years.)

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