Endicott Companys December 31, 2010, balance sheet reported retained earnings of $86,500, and net income of $124,000

Question:

Endicott Company’s December 31, 2010, reported retained earnings of $86,500, and net income of $124,000 was reported in the 2010 income statement. While preparing for the year ended December 31, 2011, Tom Dryden, accountant for Endicott Company, discovered that net income for 2010 had been overstated by $36,000 due to an error in recording depreciation expense for 2010. Net income for 2011 was $106,000, and dividends of $30,000 were declared and paid in 2011.
1. What effect, if any, would the $36,000 error made in 2010 have on the company’s 2011 Compute the amount of retained earnings to be reported in Endicott Company’s December 31, 2011, Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...