Chapter 1 Problem 2-11
Reliable Company
Statement of Retained Earnings
Year Ended December 31, 2008
Retained earnings – January 1 200,000
Prior period error – overdepreciation in 2007 100,000
Change in accounting policy from FIFO to weighted average
method – credit adjustment 150,000
Corrected beginning balance 450,000
Net income 1,300,000
Decrease in appropriation for treasury share 200,000
Total 1,950,000
Cash dividends paid to shareholders ( 500,000)
Current appropriation for contingencies ( 100,000)
Retained earnings – December 31 1,350,000
Problem 2-12
Net income 3,000,000
Loss from fire ( 50,000)
Goodwill impairment ( 250,000)
Loss on sale of equipment ( 200,000)
Gain on retirement of bonds payable 100,000
Gain on life insurance settlement 450,000
Adjusted net income 3,050,000
Gondola Company
Statement of Retained Earnings
Year ended December 31, 2008
Balance – January 1 2,600,000
Compensation of prior period not accrued ( 500,000)
Correction of prior period error – credit 400,000
Adjusted beginning balance 2,500,000
Net income – adjusted 3,050,000
Stock dividend ( 700,000)
Loss on retirement of preference share ( 350,000)
Appropriated for treasury share (1,000,000)
Balance – December 31 3,500,000
No comments:
Post a Comment