Eddie Zambrano Corporation began operations on January 1, 2011. During its first

ID: 2502452 • Letter: E

Question

Eddie Zambrano Corporation began operations on January 1, 2011. During its first 3 years of operations, Zambrano reported net income and declared dividends as follows.

Net income Dividends declared 2011 $41,400 $ Eddie Zambrano Corporation began operations on January 1, 2011. During its first 3 years of operations, Zambrano reported net income and declared dividends as follows.

Net income Dividends declared 2011 $41,400 $ Net income Dividends declared Eddie Zambrano Corporation began operations on January 1, 2011. During its first 3 years of operations, Zambrano reported net income and declared dividends as follows.

Net income Dividends declared 2011 $41,400 $ Eddie Zambrano Corporation began operations on January 1, 2011. During its first 3 years of operations, Zambrano reported net income and declared dividends as follows. The following information relates to 2014. Prepare a 2014 retained earnings statement for Eddie Zambrano Corporation. (List items that increase retained earnings first.)

Explanation / Answer

Income before income tax

$234,400

ADD:-Prior period adjustment: understatement of 2012 depreciation expense (before taxes)

$30,100

ADD:-Cumulative decrease in income from change in inventory methods (before taxes)

$42,100

ADJUSTED NET INCOME

162200

TAX [40% OF 162200]

64880

PROFIT AVAILABLE TO SHAREHOLDERS

97320

STATEMENT OF RETAINED EARNINGS

OPENING BALANCE [(41400+134500+169200)