Checkered Rides Inc. has a March 31, 2021 fiscal year end and a 35% income tax rate. The following information is available for its 2021 year end:
1. Performed $ 880,000 service revenue and paid $ 325,000 in salaries. Interest expense was $ 12,600.
2. Paid dividends in December 2020 of $ 14,000 that had been declared in November 2020.
3. On March 10, 2021 declared dividends of $ 19,000 payable April 30, 2021.
4. Recorded and remitted taxes of $ 140,000 (related to 2021 fiscal year) during the year.
5. Issued common shares for $ 15,000 on January 31, 2021.
6. Retained earnings balance on April 1, 2020 is $ 67,000.
Instructions
a) Prepare an income statement and record the adjustment to income tax.
b) Prepare a statement of retained earnings.

Question

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The Answer of Checkered Rides Inc. has a March 31, 2021 fiscal year end and a 35% income tax rate. The following information is available for its 2021 year end:
1. Performed $ 880,000 service revenue and paid $ 325,000 in salaries. Interest expense was $ 12,600.
2. Paid dividends in December 2020 of $ 14,000 that had been declared in November 2020.
3. On March 10, 2021 declared dividends of $ 19,000 payable April 30, 2021.
4. Recorded and remitted taxes of $ 140,000 (related to 2021 fiscal year) during the year.
5. Issued common shares for $ 15,000 on January 31, 2021.
6. Retained earnings balance on April 1, 2020 is $ 67,000.
Instructions
a) Prepare an income statement and record the adjustment to income tax.
b) Prepare a statement of retained earnings.