Question

The following information is from Amos Company for the year ended December 31, 2019.

a. Retained earnings at December 31, 2018 (before discovery of error), $858,000.
b. Cash dividends declared and paid during the year, $11,000.
c. Two years ago, it forgot to record depreciation expense of $45,600 (net of tax benefit).
d. The company earned $209,000 in net income this year.
Required :
Prepare a statement of retained earnings for Amos Company.

Answer 1

Step-by-step explanation:

The preparation of the statement of retained earnings for Amos Company is shown below:

Retained earnings at December 31, 2018 (before discovery of error) $858,000

Less: Depreciation expense two years ago -$45,600

Add: net income $209,000

Less: Cash dividends declared and paid during the year -$11,000

Retained earnings at December 31, 2019 $1,010,400