(Retained Earnings Statement, Prior Period Adjustment) Below is the retained earnings account for the year 2004 for...
Question:
(Retained Earnings Statement, Prior Period Adjustment) Below is the retained earnings account for the year 2004 for LeClair Corp.
(a) Prepare a corrected retained earnings statement. LeClair Corp. normally sells investments of the type mentioned above.
(b) State where the items that do not appear in the corrected retained earnings statement should beshown.
Retained earnings, January 1, 2004 Add: Gain on sale of investments (net of tax) Net income Refund on litigation with government, related to the year 2001 (net of tax) Recognition of income earned in 2003, but omitted from income statement in that year (net of tax) Deduct: Loss on discontinued operations (net of tax) Write-off of goodwill (net of tax) Cumulative effect on income in changing from straight-line depreciation to accelerated depreciation in 2004 (net of tax) Cash dividends declared Retained earnings, December 31, 2004 $41,200 84,500 21,600 25,400 25,000 60,000 18,200 32,000 $257,600 172,700 430,300 135,200 $295,100
Step by Step Answer:
b 1 Gain on sale of investments x body of income statement This gain should not be shown net of ...View the full answer
Intermediate Accounting
ISBN: 978-0470423684
13th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
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