It is now December 31, 2022, and it was discovered that in 2021 the company incorrectly recorded too much depreciation in the amount of $15,000. The company has a tax rate of 20%.

The company had retained earnings on January 1, 2022, of $220,000, a profit for the year of $68,000, and declared $28,000 of dividends, with $23,000 of those being paid by December 31, 2022.

Required:

a) Provide the adjusting journal entry to correct the prior period error from 2021. 

b) Prepare the restated statement of retained earnings for December 31, 2022

Answer rating: 100% (QA)

Quesiton a Quesiton b Date Account Title 31Dec22 Accumulated Depreciation Retained Earnings ... View the full answer