Preparing a statement of retained earnings Kelly May Bakery, Inc. reported a prior-period adjustment in 2018. An accounting error caused net income of prior years to be overstated by $1,000. Retained Earnings at December 31, 2017, as previously reported, was $48,000. Net income for 2018 was $74,000, and dividends declared were $28,000. Prepare the company’s statement of retained earnings for the year ended December 31, 2018.
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Ответ:
Retained earnings at December 31, 2018 is $93,000
Explanation:
Adjusted retained earnings at December 31, 2018 is calculated as
= Retained earnings in December 2017 - Over stated amount
= $48,000 - $1,000
= $47,000
Retained earnings for 2018 is calculated as;
= Net income - Dividend
= $74,000 - $28,000
= $46,000
Therefore,
Kelly May Bakery, Inc.'s statement of retained earnings for the year ended December 31, 2018
Adjusted retained earnings at December 31, 2017 $47,000
Retained earnings for 2018.
$46,000
Retained earnings at December 31, 2018
$93,000
Ответ:
Retained Earnings, January 1, 2018 as originally reported 48,000
Prior period adjustment (1,000)
Retained Earnings, January 1, 2018 as adjusted 47,000
Net Income for the year 74,000
121,000
Dividends declared (28,000)
Retained Earnings, December 31, 2018 93,000
Explanation:
Retained Earnings at the end of 2017 (12/31/17) was 48,000 before error was noticed. So, originally reported would be 48,000 and if you ended 2017 with 48,000- you start 2018 with 48,000.
Prior period adjustment is the error that was reported, overstated by 1,000 means they were a 1000 over so that amount needs to be deducted. 48,000 - 1,000 = 47,000
Thus 47,000 is the adjusted retained earnings for (01//01/18)
Net Income (74,000) + Adjusted retained earnings (47,000) = 121,000
subtracts dividends declared because that'll be what you pay stockholders...
121,000-28,000=93,000
Answer for end of the year retained earnings is 93,000
Check Figure is 93,000
Ответ:
A
Explanation:
the answer is A