Sweet Stuff Bakery, Inc. reported a prior-period adjustment in 2025. An accounting error caused net income of prior years to be overstated by $10,000. Retained Earnings at December 31, 2024, as previously reported, was $47,000. Net income for 2025 was $71,000, and dividends declared were $29,000. Prepare the company's statement of retained earnings for the year ended December 31, 2025. (Enter any current period increases in retained earnings prior to the subtotal, and enter any current period decreases to retained earnings below the subtotal.) Sweet Stuff Bakery, Inc. Statement of Retained Earnings Year Ended December 31, 2025

Sweet Stuff Bakery, Inc. reported a prior-period adjustment in 2025. An accounting error caused net income of prior years to be overstated by $10,000. Retained Earnings at December 31, 2024, as previously reported, was $47,000. Net income for 2025 was $71,000, and dividends declared were $29,000. Prepare the company's statement of retained earnings for the year ended December 31, 2025. (Enter any current period increases in retained earnings prior to the subtotal, and enter any current period decreases to retained earnings below the subtotal.) Sweet Stuff Bakery, Inc. Statement of Retained Earnings Year Ended December 31, 2025

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...

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Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and taxable income for 2020. The prior period adjustment was the result of an error in calculating bad debt expense for 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. When the company applies intraperiod income tax allocation, the prior period adjustment will be shown on the: a. income statement at 12,000 b. income statement at 8,400 (net of 3,600 income taxes) c. retained earnings statement at 12,000 d. retained earnings statement at 8,400 (net of 3,600 income taxes)
Clock Company showed the following errors in their account during December 31, 2021: Dividends of P 100,000 had been declared but was not recorded on December 10, 2021. Buildings and equipment maintenance for P 480,000 had been debited to expense at the end of April 2020. It had an estimated life of 8 years. The company failed to record sales commissions payable amounting to P 10,500 and P 19,000 at the end of 2020 and 2021, respectively. Supplies on hand amounting to P 6,000 and P 15,000 were not recognized at the end of 2020 and 2021, respectively. What is the net effect of the error in the 2021 net income? a.P 59,500 over b.P 72,200 under c.P 75,000 over d.P 70,000 over
SM Company prepared an aging of its accounts receivable at December 31, 2021 and determined that the estimated uncollectibles on that date was P74,300. During 2021, some customers’ accounts were written off. Additional information is available as follows:Allow. for Uncollectible Accts, Dec. 31, 2020 - P63,000Uncollectible accounts expense reported in the statement of comprehensive income - P18,000Accounts Receivable, Dec. 31, 2021 - P607,500Recovery during 2021 of accounts previously written off - P12,000How much were the accounts written off during 2021?
The following is a partial listing of accounts for XYZ, Inc., for the year ended December 31, 2020. Required: Prepare multiple step income statement for the year of 2020. Finished Goods Current Maturities of Long-Term Debt Accumulated Depreciation Accounts Receivable $ 38,872 2,515 19,960 Sales Revenue 6,273 127,260 Treasury Stock 251 Prepaid Expenses 2,199 Deferred Taxes (long-term liability) 8,506 Interest Expense 2,410 Allowance for Doubtful Accounts 915 Retained Earnings 18,951 Raw Materials 9,576 Accounts Payable 19,021 Cash and Cash Equivalents 8,527 Sales Salaries Expense 872 Cost of Goods Sold 82,471 Investment in Unconsolidated 3,559 Subsidiaries Income Taxes Payable 8,356 Work In Process 1,984 Additional Paid-In Capital 9,614 Equipment 41,905 Long-Term Debt 15,258 Rent Income 2,468 Common Stock 3,895 Notes Payable (short-term) 6,156 Income Tax Expense 2,461
Jacob, Inc., changed from the average cost to the FIFO cost flow assumption in 2019. The increase in the prior year's income before taxes is €1,100,000. The tax rate is 35%. Jacob's 2019 journal entry to record the change in accounting policy will include. a. a debit to Retained Earnings for €1,100,000. b. a credit to Retained Earnings for €1,100,000. a debit to Inventory for €715,000. C. a credit to Deferred Tax Liability for €385,000
8. The Clarity, Inc. has determined its 2018 profit to be P5,000,000. In an initial audit of the company's financial statements, you determined the following: Revenue received in advance in 2018 of P250,000 was credited to a revenue account when received. Of the total, P50,000 was earned in 2018, P120,000 will be earned in 2019, and the remainder will be earned in 2020. No adjustment was made at the end of 2018. P150,000 unrealized loss on FVPL (financial assets at fair value through profit or loss) in 2018 was erroneously debited to other comprehensive income account. What is the corrected profit for the year 2018? A. P4,600,000. B. P4,650,000. C. P4,850,000. D. P4,930,000.
The following pretax amounts pertain to Company for the year ended December 31, 2020:Sales –P800,000; Distribution and administrative costs –P84,000; Other income –P40,000; Interest expense –P4,000; Cost of goods sold –P480,000; Correction of prior period error (credit) –P16,000; Discontinued operations (debit) –P40,000; Cumulative effect of change in accounting policy (credit) –P28,000; Retained earnings, January 1 (not restated) –P160,000; Dividends declared –P12,000; Income tax rate is 30%. How much retained earnings would be shown on December 31, 2020 statement of financial position?
At December 31, 2020, end of the annual reporting period, the accounts of ABC company showed the following: a. Sales Revenue for 2020, P 180,000 of which one-sixth was on credit b. Allowance for doubtful accounts, balance January 1, 2020, P900 credit c. Account Receivable, balance December 31, 2020 (prior to any write-offs of uncollectible accounts during 2019), P18,050 d. Uncollectible accounts to be written off, December 31, 2020, P1,050 e. Aging Schedule at December 31, 2020, showing the following breakdown of total accounts receivable: Status Amount Not past Due P10,000 Past Due 1-60 days 4,000 Past Due over 60 days 3,000 Required:1. Give the 2020 entry to write off the uncollectible accounts.2. Give the 2020 adjusting entry to record bad debt expense for each of the following independent assumptions concerning bad debt loss rates:a. On total receivables at year-end, 2.5 percentb. On aging schedule: not past due, 0.5 percent; past due 1-60 days, 1 percent;…
At December 31, 2020, end of the annual reporting period, the accounts of ABC company showed the following: a. Sales Revenue for 2020, P 180,000 of which one-sixth was on credit b. Allowance for doubtful accounts, balance January 1, 2020, P900 credit c. Account Receivable, balance December 31, 2020 (prior to any write-offs of uncollectible accounts during 2019), P18,050 d. Uncollectible accounts to be written off, December 31, 2020, P1,050 e. Aging Schedule at December 31, 2020, showing the following breakdown of total accounts receivable: Status Amount Not past Due P10,000 Past Due 1-60 days 4,000 Past Due over 60 days 3,000 Required:1. Give the 2020 entry to write off the uncollectible accounts2. Give the 2020 adjusting entry to record bad debt expense for each of the following independent assumptions concerning bad debt loss rates:a. On total receivables at year-end, 2.5 percentb. On aging schedule: not past due, 0.5 percent; past due 1-60 days, 1 percent;…
A company reported net income of 9.3 million; 10.3 million and 9.7 million for the years 2020, 2021 and 2022 respectively. In an audit conducted in 2022, the following was determined: a. Harry failed to accrue interest on the following notes. It was revealed that Harry recognizes the total interest income on the notes upon its collection on its due date. Principal Date Received Interest Due Date Note receivable - A 500,000 June 1, 2020 12% October 1, 2021 Note receivable - B 400,000 May 31, 2021 15% June 30, 2022 Note receivable - C 750,000 October 31, 2020 18% November 30, 2022 b. Harry paid 15 months' rent on June 1, 2022 amounting to 210,000. Harry uses the asset method in recording prepayments. No adjustments were made yet concerning this. c. Payment of salaries in 2020 amounting to 380,000 was inadvertently charged against the cash on hand. It should have been charged to cash in bank. d. The ending inventory in 2020 is overstated by 450,000 while the beginning inventory in 2022 is…
The Phillips Company gathered the following information pertaining to its year ended December 31, 2020 prior to any adjustments: Net Sales for the Year $780,000 Accounts Receivable, 12/31 165,000 Allowance for Uncollectible Accounts, 12/31 2,200 Debit Assume that Phillips uses the percentage of outstanding accounts receivable method for uncollectible amounts. An aging of accounts receivable indicates that $9,550 will be uncollectible. Phillips will report the following amounts in its 2020 financial statements: Select one: a. Bad debts expense $11,750; Net accounts receivable $155,450 b. Bad debts expense $9,550; Net accounts receivable $155,450 c. Bad debts expense $9,550; Net accounts receivable $157,650 d. Bad debts expense $1,750; Net accounts receivable $157,650 e. Bad debts expense $7,350; Net accounts receivable $157,650
Upon inspection of the records of Eisenhower Company in connection to its financial statement audit for the year ended December 31, 2022, the following errors were revealed: A fire insurance premium of P 40,000 was paid and charged to insurance expense in 2021. This covers one year from April 1, 2021. Inventory at December 31, 2020 was understated by P 80,000. Inventory at December 31, 2021 was understated by P 120,000. The year 2021 last quarter taxes amounting to P 60,000 were paid on January 19, 2022 and charged to expense account of 2022. A cash advance of P 100,000 in payment of goods to be delivered in January 2022 was received on December 15, 2021 and credited to Sales. The gross profit on sales is 40%. The net income for the year ended December 31, 2021 before any adjustments is P 1,550,000. Group of answer choices 1,600,000 1,200,000 1,440,000 1,550,000