Question

Ramire2 Company Insta. 1 Inbox (3)-205040e X apters 7 to 12 6 Saved Exercise 11-11 Preparing a statement of retained earnings Lo c3 The following information is available for Amos Company for the year ended December 31, 2017 o. Balance of retained earnings, December 31. 2016, prior to discovery of error, $861.000. b. Cash dividends declared and paid during 2017, $11,000 c. It neglected to record 2015 depreciation expense of $41,600, which is net of $7.200 in tax benefits d. The company earned $206,000 in 2017 net income Prepare a 2017 statement or retained earnings for Amos Company (Amounts to be deducted should be indicated witha minus sini Staternent of Retained Eamings For Year Ended December 31, 2017 Prior period adustmee 2 3 456

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Answer 1

Prior period adjustments are to be adjusted in the opening retained earnings. As this are not current year expenses or income, prior period tems will not affect current year's financial statements. The prior period tems are adjusted by restating the assets and liabilities and other effect goes to the retained earnings at the beginning of the year. AMOS COMPANY Statement of retained earnings For the year ended December 31, 2017 Particulars Amount ($) 8,61,000 (34,400) 8,26,600 Retained earnings, January 1, 2017 Prior period adjustments (net of tax) Adjusted retained earnings, January 1, 2017 Current year's adjustments Add: net income of the year 2017 Less: Dividends Retained earnings, December 31, 2017 2,06,000 (11,000) 10,21,600