Question
The ledger of Wildhorse Limited at October 31, 2021, contains the following summary data: Cash dividendscommon $126,000 Common shares 651,000 Depreciation expense 98,000 Service revenue
The ledger of Wildhorse Limited at October 31, 2021, contains the following summary data:
| Cash dividendscommon | $126,000 | |
| Common shares | 651,000 | |
| Depreciation expense | 98,000 | |
| Service revenue | 1,472,000 | |
| Operating expenses | 932,000 | |
| Interest expense | 61,000 | |
| Retained earnings, November 1, 2020 | 576,000 |
Your analysis reveals the following additional information:
| 1. | The company has a 25% income tax rate. | |
| 2. | On March 19, 2021, Wildhorse discovered an error made in the previous fiscal year. A $62,000 payment of a note payable had been recorded as interest expense. | |
| 3. | On April 10, 2021, common shares costing $82,000 were reacquired for $106,000. This is the first time the company has reacquired common shares. |
Prepare a journal entry to correct the prior period error. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
| Date | Account Titles and Explanation | Debit | Credit |
| Mar. 19, 2021 | |||
| (To record correction of error.) |
eTextbook and Media
List of Accounts
Prepare the journal entry to record the reacquisition of common shares. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
| Date | Account Titles and Explanation | Debit | Credit |
| Apr. 10, 2021 | |||
| (To record reacquisition of common shares.) |
eTextbook and Media
List of Accounts
Calculate profit for the year ended October 31, 2021.
| Profit | $ |
eTextbook and Media
List of Accounts
Prepare the statement of retained earnings for the company for the year ended October 31, 2021. (List items that increase retained earnings first.)
| WILDHORSE LIMITED Statement of Retained Earnings Year Ended October 31, 2021October 31, 2021Month Ended October 31, 2021 | ||
| Cash DividendsOther Comprehensive IncomeComprehensive IncomeBalance, November 1, 2020 as Previously ReportedBalance October 31, 2021Profit before Income TaxesTotal ExpensesProfit from OperationsExpensesRevenuesBalance, November 1 as AdjustedReacquired Common SharesCorrection of Error in Recording Payment on Notes Payable in 2020Total RevenuesProfit / (Loss) | $ | |
| LessAdd: Profit before Income TaxesBalance, November 1, 2020 as Previously ReportedProfit from OperationsRevenuesReacquired Common SharesTotal RevenuesBalance, November 1 as AdjustedComprehensive IncomeCash DividendsExpensesBalance October 31, 2021Total ExpensesOther Comprehensive IncomeProfit / (Loss)Correction of Error in Recording Payment on Notes Payable in 2020 | ||
| Total RevenuesProfit before Income TaxesCorrection of Error in Recording Payment on Notes Payable in 2020Reacquired Common SharesProfit / (Loss)Balance October 31, 2021Profit from OperationsExpensesCash DividendsRevenuesBalance, November 1 as AdjustedComprehensive IncomeBalance, November 1, 2020 as Previously ReportedTotal ExpensesOther Comprehensive Income | ||
| AddLess: Reacquired Common SharesBalance, November 1 as AdjustedExpensesProfit from OperationsCash DividendsBalance, November 1, 2020 as Previously ReportedOther Comprehensive IncomeComprehensive IncomeTotal ExpensesProfit / (Loss)Total RevenuesProfit before Income TaxesRevenuesCorrection of Error in Recording Payment on Notes Payable in 2020Balance October 31, 2021 | ||
| AddLess: | ||
| Reacquired Common SharesProfit before Income TaxesCorrection of Error in Recording Payment on Notes Payable in 2020Total ExpensesBalance, November 1 as AdjustedProfit from OperationsOther Comprehensive IncomeBalance October 31, 2021Balance, November 1, 2020 as Previously ReportedComprehensive IncomeCash DividendsProfit / (Loss)ExpensesTotal RevenuesRevenues | $ | |
| Correction of Error in Recording Payment on Notes Payable in 2020Reacquired Common SharesTotal ExpensesProfit before Income TaxesCash DividendsTotal RevenuesProfit / (Loss)Other Comprehensive IncomeRevenuesComprehensive IncomeBalance October 31, 2021Profit from OperationsBalance, November 1 as AdjustedBalance, November 1, 2020 as Previously ReportedExpenses | ||
| Total ExpensesComprehensive IncomeProfit / (Loss)Balance, November 1 as AdjustedTotal RevenuesOther Comprehensive IncomeProfit from OperationsCash DividendsBalance October 31, 2021ExpensesReacquired Common SharesProfit before Income TaxesBalance, November 1, 2020 as Previously ReportedCorrection of Error in Recording Payment on Notes Payable in 2020Revenues | $ | |
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Fundamental Accounting Principles
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
20th Edition
1259157148, 78110874, 9780077616212, 978-1259157141, 77616219, 978-0078110870
