1. Business
  2. Accounting
  3. presented below are the comparative income and retained earnings statements...

Question: presented below are the comparative income and retained earnings statements...

Question details

Presented below are the comparative income and retained earnings statements for Carla Inc. for the years 2017 and 2018 2018 2017 $328,000 212,000 116,000 87,100 $28,900 $101,900 28,900 $255,000 151,000 104,000 50,700 $53,300 $75,700 53,300 (27,100) $101,900 Sales Cost of sales Gross profit Net income Retained ernings Dan. 1) Net income Dividends Retained earnings (Dec. 31) (31,300) $99,500 The following additional information is provided: 1. In 2018, Carla Inc. decided to switch its depreciation method from sum-of-the-years digits to the straight-line method. The assets were purchased at the beginning of 2017 for $95,000 with an 2. In 2018, the company discovered that the ending inventory for 2017 was overstated by $22,800; ending inventory for 2018 is correctly stated. Prepare the revised retained earnings statement for 2017 and 2018, assuming comparative statements. (Ignore income taxes.) estimated useful life of 4 years and no salvage value. (The 2018 income statement contains depreciation expense of $28,500 on the assets purchased at the beginning of 2017.) CARLA INC. Retained Earnings Statement For the Year Ended 2018 2017

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