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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 2
Reporting a prior-period adjustment
Wells Research Service, Inc., (WRSI) ended 2011 with retained earnings of $73,000. During 2012, WRSI earned net income of $93,000 and declared dividends of $26,000. Also during 2012, WRSI got a $20,000 tax refund from the Internal Revenue Service. A tax audit revealed that WRSI paid too much income tax back in 2010.
Requirement
1. Prepare WRSI's statement of retained earnings for the year ended December 31, 2012, to report the prior-period adjustment.
Wells Research Service, Inc., (WRSI) ended 2011 with retained earnings of $73,000. During 2012, WRSI earned net income of $93,000 and declared dividends of $26,000. Also during 2012, WRSI got a $20,000 tax refund from the Internal Revenue Service. A tax audit revealed that WRSI paid too much income tax back in 2010.
Requirement
1. Prepare WRSI's statement of retained earnings for the year ended December 31, 2012, to report the prior-period adjustment.
Explanation
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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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