Question

The following information is from Amos Company for the year ended December 31, 2019.

1. Retained earnings at December 31, 2018 (before the discovery of error), $854,000.
2. Cash dividends declared and paid during the year, $12,000.
3. Two years ago, it forgot to record the depreciation expense of $46,600 (net of tax benefit).
4. The company earned $223,000 in net income this year.

Prepare a statement of retained earnings for Amos Company. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Answer:

Retained earnings December 31st, 2018	$854000
Prior period adjustment
Depreciation expense error	-$46600
Adjusted retained earnings December 31st, 2018	$807400
Add: Net income	$223000
Less: Dividend	-$12000
Retained earnings December 31st, 2019	$1018400