Reference no: EM132823303

Question - C Co. reported a retained earnings balance of $300,000 at December 31, 2020. In September 2021, C determined that insurance premiums of $75,000 for the three-year period beginning January 1, 2020, had been paid and fully expensed in 2020. C has a 20% income tax rate. What amount should C report as adjusted beginning retained earnings in its 2021 statement of retained earnings?

Doug Smith Industries purchased warehouses for $121 million (no residual value) at the beginning of 2018. The warehouses were being depreciated over a 10-year life using the sum-of-the-years'-digits method. At the beginning of 2021, management decided to change to straight-line. Ignoring taxes, the 2021 adjusting entry will include a debit to depreciation expense of.

On June 30, 2020, Intermediate Butchers, Inc. purchased an option to buy 100,000 pounds of pork bellies at a price of $2 per pound on December 31, 2020. The option cost $1,200. On June 30, 2020, the market price of pork bellies was $1.90 per pound. On December 31, 2020, the market price rose to $2.10 per pound. Will Intermediate Butchers, Inc. exercise the option? If so, what is the final cost of the pork bellies?