The ledger of Weather Vane Limited at September 30, 2017, contains the following summary data:

Your analysis reveals the following additional information:
1. The company has a 25% income tax rate.
2. On July 9, 2017, Weather Vane discovered an error made in the previous fiscal year. A $61,500 payment of a note payable had been recorded as interest expense.
3. On August 18, 2017, common shares costing $57,500 were reacquired for $90,000. This is the first time the company has reacquired common shares.
Instructions
(a) Prepare a journal entry to correct the prior period error.
(b) Prepare the journal entry to record the reacquisition of common shares.
(c) Calculate profit for the year ended September 30, 2017.
(d) Prepare the statement of retained earnings for the year ended September 30, 2017.
TAKING IT FURTHER
Why are other comprehensive income or loss amounts reported separately on the statement of comprehensive income?

Transcribed Image Text:

Cash dividends-common Common shares Depreciation expense Fees earned 150,000 Operating expenses 750,000 Commission revenue $971,000 65,000 845,000 74,000 Retained earnings, October 1, 2016 1,647,000