On January 1, 2020, Wade Corp. had retained earnings of $558,000. During 2020, Wade reported the following information:
1. |
Income from continuing operations: $1,210,000. |
2. |
Wade increased its percentage of uncollectible accounts receivable from 5% in 2019 to 10% in 2020. The new percentage was used in calculating the current year’s bad debt expense. |
3. |
Wade discontinued operations of one of its subsidiaries at a loss of $190,000 before taxes. The disposal met the criteria for discontinued operations. |
4. |
An audit discovered that amortization of intangible assets was understated by $40,000 in 2019. |
5. |
Wade’s income tax rate is 20% for both years. |
6. |
Wade declared stock dividends of $48,000. |
Instructions: Prepare a statement of retained earnings.
Solution: | ||
Statement of retained earnings | ||
$ | ||
Income from Continuing operations | $1,210,000 | |
Loss from subsidiaries | ($190,000) | |
Amortization of intamgible assets | ($40,000) | |
Net Income | $980,000 | |
Income tax @ 20% | ($196,000) | |
Income After Tax | $784,000 | |
Less: Dividend Declared | ($48,000) | |
$736,000 | ||
Add: Beginning balance of retained earnings | $558,000 | |
Ending Balance of retained earnings | $1,294,000 | |
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On January 1, 2020, Wade Corp. had retained earnings of $558,000. During 2020, Wade reported the...
On January 1, 2020, Wade Corp. had retained earnings of $558,000. During 2020, Wade reported the following information: 1. Income from continuing operations: $1,210,000. 2. Wade increased its percentage of uncollectible accounts receivable from 5% in 2019 to 10% in 2020. The new percentage was used in calculating the current year’s bad debt expense. 3. Wade discontinued operations of one of its subsidiaries at a loss of $190,000 before taxes. The disposal met the criteria for discontinued operations. 4. An...
need help with this retained earnings with ppa 5 of 6 Chapter 04 Homework - Statement of Retained Earnings Problem 4-07 Statement of retained earnings with PPA On January 1, 2020, Wade Corp. had retained earnings of $558,000. During 2020, Wade reported the following information: 1. Income from continuing operations: $1,210,000. 2. Wade increased its percentage of uncollectible accounts receivable from 5% in 2019 to 10% in 2020. The new percentage was used in calculating the current year's bad debt...
P4.7 (LO 2, 3, 4) E CUDA (Income Statement, Irregular Items) Wade Corp. has 150,000 shares of common stock outstanding. In 2020, the company reports income from continuing operations before income tax of $1,210,000. Additional transactions not considered in the $1,210,000 are as follows. 1. In 2020, Wade Corp. sold equipment for $40,000. The machine had originally cost $80,000 and had accumulated depreciation of $30,000. The gain or loss is considered non-recurring. 2. The company discontinued operations of one of...
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