Preparing a Statement of Stockholders' Equity with a Prior Period Error In 2019, the first year of operations for Sprint Co, the company reported net income of $72,000 and declared and paid dividends of $22,400. No other items affected retained earnings in 2019. On December 31, 2019, the company had the following balances in stockholders' equity accounts (other than retained earrings.common stock, $160,000 credit balance accumulated other comprehensive income, $8,000 debit balance. During 2020, the company reported net income of $140,800, ddared and paid dividends of $32,000, and reported a foreign currency translation gan of $13,600 lafter tax). Also in 2020, the company discovered that its 2019 depreciation expense was understated by $16,000 before taxes and the amount is material to the company. Assume a tax rate of 25%. Required a: Prepare a statement of stockholders' equity for Sprint Co. for the year ended December 31, 2020, Use negative signs to indicate a debit balance or a decrease to stockholders' equity Sprint Co. Statement of Stockholders' Equity For the Year Ended December 31, 2020 Common Stock Retained Earnings Accumulated OCI Total Beginning balance Prior period adjustment D Net Income 0 Dividends 0 Other Comprehensive income Foreign currenty translation D D) adjutnet of tax $ OS 01 DS Ending balance 5 0$ 0$ DS 0 D 0 0 D D 0 0 0 a b. Prepare a separate statement of retained earnings for the year ended December 31, 2020. Use negative signs to indicate a debit balance or a decrease to stockholders' equity. 0 Sprint Co. Statement of Retained Earnings For the Year Ended December 31, 2020 Hetained earnings, January 1, 2020 Prior period adjustment Adjusted balance, January 1, 2020 Net income 0 0 0 djustment, net of tax Ending bulance D D$ 0 05 $ 0 0$ 0 D b. Prepare a separate statement of retained earnings for the year ended December 31, 2020. Use negative signs to indicate a debit balance or a decrease to stockholders equity. Sprint Co. Statement of Retained Earnings For the Year Ended December 31, 2020 Retained earnings, Jaquary 1, 2020 0 Prior period adjustment Adjusted balance, January2020 Net Income 0 Dividends Retained earnings, December 31, 2020 $ 0 0 D D Check Next