Patterson Company failed to adjust for a $600,000 actual loss on pension plan assets in 2018,...
Patterson Company failed to adjust for a $600,000 actual loss on pension plan assets in 2018, resulting in an underfunded pension plan. Patterson’s tax rate is 30%. As result of this error, retained earnings would be:
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Unaffected.
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Overstated by $60,000.
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Overstated by $42,000.
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Overstated by $18,000.
Homework Answers
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Option A is the answer Unaffected |
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If there's any actual loss on the pension plan assets, such amount is entered in the accumulated other comprehensive income. Hence the retained earnings will not be affected |
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Patterson Company failed to adjust for a $600,000 actual loss on
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