Question

Question 4 View Policies Current Attempt in Progress Tamaris Corporation began operations on January 1, 2017. During its first 3 years of operations, marisk reported et income and declared dividendes follow 2017 2018 2019 Net Income $42200 131.900 16 500 Dividends declared 5-0- 56,400 55.200 The following information relates to 2020 Income before income tax Prior period dustment understatement of 2018 depreciation expense before Curative decrease in income from change in Inventory methods before Dividends declared of this amount $29.300 will be paid on Jan 15, 2001) Effective text $232.700 $29.300 $39.000 $111.000 20% Prepare a 2020 retained earning statement for Tork Corporation. I n the ca st TAMARISK CORPORATION Balaimed Earwigs Statement For the Year Ended December 31 2090 Balance, lauay 1 Reported Correction for Depreciation or Cuncia Decrease in income from Cunge in retory Method Balance, lary L isted Add Net income Les Dividends Deared Balance December 31 Toma Carrio c amini the amount of $689 on December 31, 2020 Ar this action, what would Tamaris reports totalindamist December 31200 b eshe

Answer 1

(a) Tamarisk Corporation Retained Earnings Statement For the Year Ended December 31, 2020 Balance, January 1, as reported ($43,200 + $131,900 + $ 168,500 - $56,400 - $55,200) | Correction for depreciation error (net of $29,300,- 20% tax rate of $5,860 tax) Cumulative decrease in income from change in inventory methods (net of $39,000 - 20% tax of $7,800 tax) Balance, January 1, as adjusted Add: Net income ($232,700 - ($232,700 * 20%)] $232,000 -23,440 -31,200 $177,360 186,160 363,520 111,600 $251,920 Deduct dividends declared Balance, December 31 (b) Total retained earnings would still be reported as $251,920. A restriction does not affect total retained earnings, it merely labels part of the retained earnings as being unavailable for dividend distribution. Retained earnings would be reported as follows: Retained earnings: Appropriated Unappropriated Total $68,890 183,0301 $251,920