Question
Oriole Corporation began operations on January 1, 2017. During its first 3 years of operations, Oriole reported net income and declared dividends as follows: Net
Oriole Corporation began operations on January 1, 2017. During its first 3 years of operations, Oriole reported net income and declared dividends as follows:
Net income | Dividends declared | |||||
2017 | $46,500 | $ 0 | ||||
2018 | 135,000 | 53,900 | ||||
2019 | 162,300 | 53,400 |
The following information relates to 2020.
Income before income tax | $234,700 | ||
Prior period adjustment: understatement of 2018 depreciation expense (before taxes) | $26,000 | ||
Cumulative decrease in income from change in inventory methods (before taxes) | $35,500 | ||
Dividends declared (of this amount, $26,000 will be paid on Jan. 15, 2021) | $107,300 | ||
Effective tax rate | 20 | % |
Prepare a 2020 retained earnings statement for Oriole Corporation. (List items that increase adjusted retained earnings first.
)Assume Oriole Corporation restricted retained earnings in the amount of $68,980 on December 31, 2020. After this action, what would Oriole report as total retained earnings in its December 31, 2020, balance sheet?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started