Correcting entries and retained earnings

Assignment Help Accounting Basics

Reference no: EM1357547

The Controller at Tall Industries was preparing the financial statements for the year ended December 31, 2006, when he discovered an error. Apparently, the income tax expense for 2005 was understated by $40,000. He was not sure how to handle this situation and has come to you for help. He has also gathered the following information:

Retained earnings at December 31, 2005: $525,000

Cash dividend declared during 2006: $50,000

Stock dividends declared during 2006: $150,000

Net income for the year ended December 31, 2006: $200,000

a. Make the appropriate entry to correct the error.

b. Prepare a statement of retained earnings for Tall Industries for the year ended December 31, 2006.

Reference no: EM1357547

Questions Cloud

Accepting or rejecting the offer : Suppose you have 500 acres of timberland, with young timber worth $40,000 if logged now. This represents 1,000 cords of wood worth $40 per cord net of costs of cutting and hauling.

Elucidate changes in the macroenvironment affect individual : Describe how McDonald's and Wal-Mart elucidate changes in the macroenvironment affect individual firms and industries through the microeconomic factors of demand.

Prepare a memo to the president of eec detailing : Prepare a memo to the President of EEC detailing your findings and showing the effects if EEC's cost of capital increases

Compute the price elasticity of demand when price changes : Compute the price elasticity of demand when price changes from $100 to $80 per pair using the average formular.

Correcting entries and retained earnings : Make the appropriate entry to correct the error. Prepare a statement of retained earnings for Tall Industries for the year ended December 31, 2006.

Find an acceleration of box and ramp : A highway curve has a radius of 125 m. At what angle should the road be banked so that a car traveling at 27.4 m/s has no tendency to skid sideways on the road.Find an acceleration of box and ramp.

Neurological structure and processes : I need assistance with investigating the relationship between neurological structure and processes, stress, and anxiety disorder. I need to discuss:

Why is internet an attractive marketing arena for business : One B2B marketer used a lot of silliness to increase its Web traffic tenfold and generate thousands of sales leads starting. Why is the Internet such an attractive marketing arena for businesses?

Define the best crop to plant according to the decision : Explain A farmer in Holland must decide which crop to plant next season and define the best crop to plant according to the following decision criteria.

User Account

All Pages