Question
Bramble Corporation began operations on January 1, 2014. During its first 3 years of operations, Bramble reported net income and declared dividends as follows. Assume
Bramble Corporation began operations on January 1, 2014. During its first 3 years of operations, Bramble reported net income and declared dividends as follows. Assume Bramble Corporation restricted retained earnings in the amount of $69,320 on December 31, 2017. After this action, what would Bramble report as total retained earnings in its December 31, 2017, balance sheet? Total retained earnings $ Net income Dividends declared 2014 $44,000 $ 0 2015 132,600 57,800 2016 164,100 56,700 The following information relates to 2017. Income before income tax $242,000 Prior period adjustment: understatement of 2015 depreciation expense (before taxes) $28,400 Cumulative decrease in income from change in inventory methods (before taxes) $40,200 Dividends declared (of this amount, $28,400 will be paid on January 15, 2018) $114,500 Effective tax rate 40 %
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