prepare a corrected retained earnings statement acadian corp normally sells investme 644359

Aug 30, 2021 | Uncategorized

(Retained Earnings Statement, Prior Period Adjustment) Below is the Retained Earnings account for the year 2012 for Acadian Corp.

Retained   earnings, January 1, 2012

  

$257,600

Add:

    

Gain on   sale of investments (net of tax)

$41,200

  

Net   income

84,500

  

Refund   on litigation with government, related to the year 2009
  (net of tax)

21,600

  

Recognition   of income earned in 2011, but omitted from income
  statement in that year (net of tax)

25,400

172,700
   

430,300

Deduct:

    

Loss on   discontinued operations (net of tax)

35,000

  

Write off   of goodwill (net of tax)

60,000

  

Cumulative   effect on income of prior years in changing from

    

LIFO to   FIFO inventory valuation in 2012 (net of tax)

23,200

  

Cash   dividends declared

32,000

150,200

Retained   earnings, December 31, 2012

  

$280,100

Instructions

(a) Prepare a corrected retained earnings statement. Acadian Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2012 to compute net income.

(b) State where the items that do not appear in the corrected retained earnings statement should be shown.