1. What is the adjustment of retained earnings on January 1, 2022?*

On January 31, 2022, RUBY Company agreed to pay the former president #300,000 under a deferred compensation arrangement. RUBY should have recorded this expense in 2021 but did not do so. The income tax expense would have been P70,000 lower in 2021 had it properly accrued this deferred compensation.ROSY Company reported the following equipment on December 31, 2021: Index numbers at the end of each year are 120 for 2018, 125 for 2020, and 350 for 2021. Accumulated Cost depreciation Acquired in December 2018 P 4,000,000 P 1,600,000 Acquired in December 2020 1,000,000 200,000