Question
The Retained Earnings account of Merry Exams Morty Company shows the following debits and credits for the year 2020: RETAINED EARNINGS Date Description Debit Credit
The Retained Earnings account of Merry Exams Morty Company shows the following debits and credits for the year 2020:
RETAINED EARNINGS | ||||
Date | Description | Debit | Credit | Balance |
Jan. 1 | Balance |
|
| 726,400 |
a) | Loss from fire | 5,250 |
| 721,150 |
b) | Write-off of goodwill | 52,500 |
| 668,650 |
c) | Stock dividends distributed | 140,000 |
| 528,650 |
d) | Loss on sale of equipment | 48,300 |
| 480,350 |
e) | Officers compensation related to income of prior periods accrual overlooked | 325,500 |
| 154,850 |
f) | Loss on retirement of preferred shares at more than issue price | 70,000 |
| 84,850 |
g) | Paid in capital in excess of par |
| 129,500 | 214,350 |
h) | Stock issuance expenses (related to letter g) | 10,000 |
| 204,350 |
i) | Stock subscriptions defaults |
| 8,470 | 212,820 |
j) | Gain on retirement of preferred stock at less than issue price |
| 25,900 | 238,720 |
k) | Gain on early retirement of bonds |
| 15,050 | 253,770 |
l) | Gain on life insurance policy settlement |
| 10,500 | 264,270 |
m) | Correction of prior period error |
| 50,050 | 314,320 |
n) | Effect of change in accounting policy from FIFO to weighted average |
| 100,000 | 414,320 |
o) | Dividends payable | 25,000 |
| 389,320 |
p) | Loss on sale of treasury stock | 20,000 |
| 369,320 |
q) | Proceeds from sale of donated stock |
| 40,000 | 409,320 |
r) | Appraisal increase in land |
| 250,000 | 659,320 |
s) | Appropriated for property acquisition | 100,000 |
| 559,320 |
The entry to correct the Retained Earnings account will include:
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