Solution-What is the retained earnings balance as adjusted

What is the retained earnings balance as adjusted

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Reference no: EM133150591

Question - Assume the beginning balance of Retained Earnings for 2020 is $1,600,000 and that dividends of $47,100 were declared during the year. Net Income was $125,400.

Additional information is as follows:

At the beginning of 2018, Mon Inc. purchased equipment for $66,000 (residual value of $8,000) that has a useful life of 5 years.

The bookkeeper used straight-line depreciation for 2018 & 2019, but failed to deduct the residual value in calculating the depreciable amount.

Pukht Inc. decided to change its method of inventory pricing from average cost to the FIFO method. The effect of this change on prior years is to increase 2018 income by $32,100 and decrease 2019 income by $22,700 before taxes. The FIFO method has been used for 2020.

In January 2020, Mon Inc. changed its bad debt estimates. The new estimate was used for the current year. The overall effect of this change on prior years would be an increase in net income of $18,000.

What is the Retained Earnings balance as adjusted for 2020?

What is the Retained Earnings ending balance for Dec 31, 2020?

Reference no: EM133150591

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What is the retained earnings balance as adjusted

Reference no: EM133150591

Reference no: EM133150591

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