Question: Please show all work and explanations. Thank you! E3.12 (LO 3) Retained Earnings Statement Eddie Zambrano Corporation began operations on January 1, 2022. During its
Please show all work and explanations.
Thank you!
| E3.12 (LO 3) Retained Earnings Statement | |||||
| Eddie Zambrano Corporation began operations on January 1, 2022. During its first 3 years of operations, Zambrano reported net income and declared dividends as follows. | |||||
| Net Income | Dividends Declared | ||||
| 2022 | $ 40,000 | $ - | |||
| 2023 | 125,000 | 50,000 | |||
| 2024 | 160,000 | 50,000 | |||
| The following information relates to 2025. | |||||
| Income before income tax | $ 240,000 | ||||
| Prior period adjustment: Understatement of 2023 depreciation | |||||
| expense (before taxes) | 25,000 | ||||
| Dividends declared (of this amount, $25,000 will be paid | 100,000 | ||||
| on Jan. 15, 2026) | |||||
| Effective tax rate | 20% | ||||
| Instructions | |||||
| a. | Complete the 2025 retained earnings statement for Eddie Zambrano Corporation. | ||||
| b. | Assume Eddie Zambrano Corporation restricted retained earnings in the amount of $70,000 on December 31, 2025. After this action, what would Zambrano report as total retained earnings in its December 31, 2025, balance sheet? | ||||
| NOTE: Enter a formula, a cell reference, or a value (if you are unable to reference a cell), into the yellow shaded input cells. | |||||
| a. | EDDIE ZAMBRANO CORPORATION | ||||
| Retained Earnings Statement | |||||
| For the Year Ended December 31, 2025 | |||||
| b. | Retained earnings: | ||||
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Problem E312 Retained Earnings Statement for Eddie Zambrano Corporation Given Data Recap Year Net Income Dividends Declared 2022 40000 0 2023 125000 5... View full answer
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