Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Neilson Tool Corporation's December 31 year-end financial statements contained the following errors: An insurance premium of $51,000 covering the years 2019,2020 , and 2021 was
Neilson Tool Corporation's December 31 year-end financial statements contained the following errors: An insurance premium of $51,000 covering the years 2019,2020 , and 2021 was prepaid in 2019 , with the entire amount charged to expense that year. In addition, on December 31, 2020, fully depreciated machinery was sold for $15,400 cash, but the entry was not recorded until 2021. There were no other errors during 2019 or 2020 , and no corrections have been made for any of the errors. Neilson follows ASPE. Answer the following, ignoring income tax considerations. Assume that the company has retained earnings on January 1,2019 and 2020 , of $1,264,000 and $1,639,500, respectively; net income for 2019 and 2020 of $438,000 and $387,000, respectively; and cash dividends declared for 2019 and 2020 of $62,500 and $41,000, respectively, before adjustment for the above items. Prepare a revised statement of retained earnings for 2019 and 2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Neilson Tool Corporation's December 31 year-end financial statements contained the following errors: An insurance premium of $51,000 covering the years 2019,2020 , and 2021 was prepaid in 2019 , with the entire amount charged to expense that year. In addition, on December 31, 2020, fully depreciated machinery was sold for $15,400 cash, but the entry was not recorded until 2021. There were no other errors during 2019 or 2020 , and no corrections have been made for any of the errors. Neilson follows ASPE. Answer the following, ignoring income tax considerations. Assume that the company has retained earnings on January 1,2019 and 2020 , of $1,264,000 and $1,639,500, respectively; net income for 2019 and 2020 of $438,000 and $387,000, respectively; and cash dividends declared for 2019 and 2020 of $62,500 and $41,000, respectively, before adjustment for the above items. Prepare a revised statement of retained earnings for 2019 and 2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started