Question
The ledger of Pharoah Limited at October 31, 2021, contains the following summary data: Cash dividendscommon $110,000 Common shares 635,000 Depreciation expense 82,000 Service revenue
The ledger of Pharoah Limited at October 31, 2021, contains the following summary data: Cash dividendscommon $110,000 Common shares 635,000 Depreciation expense 82,000 Service revenue 1,456,000 Operating expenses 916,000 Interest expense 45,000 Retained earnings, November 1, 2020 560,000 Your analysis reveals the following additional information: 1. The company has a 25% income tax rate. 2. On March 19, 2021, Pharoah discovered an error made in the previous fiscal year. A $46,000 payment of a note payable had been recorded as interest expense. 3. On April 10, 2021, common shares costing $66,000 were reacquired for $90,000. This is the first time the company has reacquired common shares. Collapse question part (a) Prepare a journal entry to correct the prior period error
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