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need help with this retained earnings

Chapter 04 Homework - Statement of Retained Earnings Problem 4-03 Statement of retained earnings with PPA Maher Inc. reported
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Answer #1

Net Income Befor Tax :-

= Net Income / (1-Tax Rate)

= $442000 / (1-0.20)

= $442000 / 0.80

= $552500

New Net Income After Tax :-

Particulars Amount($)
Net Income Before Tax 552500
Add : Old Depreciation ($54000-$9000)/6 7500
Less : New Depreciation ($54000-$9000)/10 (4500)
New Net Income 555500
Add : Increase in Pretax Income of 2018 40000
Add : Increase in Pretax Income of 2019 20000
615500
Less : Income Tax ($615500 * 20%) (123100)
New Income After Tax 492400

Statement of Retained Earnings :-

Particulars Amount($)
Beginning Balance of Retained Earnings 104000
Add : New Net Income 492400
Less : Dividends (120000)
Ending Balance of Retained Earnings 476400
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