Rickles,Inc.is a calendar-year corporation whose financial statements for 2013 and 2014 included errors as follows:

Assume that purchases were recorded correctly and that no correcting entries were made at December 31,2013,or December 31,2014.Ignoring income taxes,by how much should Rickles's retained earnings be retroactively adjusted at January 1,2015?
A)$27,000 increase
B)$27,000 decrease
C)$7,000 decrease
D)$3,000 decrease

Question

Rickles,Inc.is a calendar-year corporation whose financial statements for 2013 and 2014 included errors as follows:

Assume that purchases were recorded correctly and that no correcting entries were made at December 31,2013,or December 31,2014.Ignoring income taxes,by how much should Rickles's retained earnings be retroactively adjusted at January 1,2015?
A)$27,000 increase 
B)$27,000 decrease 
C)$7,000 decrease 
D)$3,000 decrease

Quizplus · Accepted Answer

The Answer of Rickles,Inc.is a calendar-year corporation whose financial statements for 2013 and 2014 included errors as follows:

Assume that purchases were recorded correctly and that no correcting entries were made at December 31,2013,or December 31,2014.Ignoring income taxes,by how much should Rickles's retained earnings be retroactively adjusted at January 1,2015?
A)$27,000 increase 
B)$27,000 decrease 
C)$7,000 decrease 
D)$3,000 decrease