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#2: Prepare a comparative Statement of Retained Earnings, in good form (heading captions are not required), for the years ended December 31, 2019 and comparative
#2: Prepare a comparative Statement of Retained Earnings, in good form (heading captions are not required), for the years ended December 31, 2019 and comparative 2018. Show separately any supporting, after the Statement of Retained Earnings, computations where required. The table is provided for convenience. 2019 $280,000 2018 $180,000 Retained earnings, as reported You are completing the audit of Hudsons Bay Ltd. (HBL) for the year ended December 31, 2019. Your substantive analytical procedures identify an anomaly in the capital asset accounts and, upon closer examination, you discover that a capital asset, acquired at the beginning of 2017, at a cost of $30,000, was capitalized in that year and has been depreciated over 6 years on a straight-line basis with no residual value consistent with the company's general capitalization and depreciation policy. This specialized asset was acquired solely for a special project started and completed in 2017 and the asset had no use after this project was completed and accordingly should have been entirely expensed in 2017 against the special project revenue. Also, during the year it was identified through computer pricing errors that the 2018 ending inventory was overstated by $7,000. The 2019 ending inventory is correct and the draft 2019 net income after tax has been adjusted for this overstatement. The company's tax rate for all periods is 30% and the company's tax filings were properly handled. Selected draft results for the current year, excluding any impact of the identified error and published results for 2018 are as follows: 2019 Drart 2018 Retained earnings, beginning $280,000 $180,000 Net income, after tax $180,000 $160,000 Dividends declared $80,000 $60,000 Dividends paid $90,000 $55,000 Required: #1: Prepare, with supporting calculations, all related entries required in 2019 to finalize the year end. If no entry is required identify no entry is required. Present entries required to adjust the beginning-of-year financial position here: Present entries required to be recorded in the current year (2019) here
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