Question 1 In its December 31, 2016 financial statements, Culver Ltd. reported r

Question

Question 1 In its December 31, 2016 financial statements, Culver Ltd. reported retained earnings of $479,000. During 2017, Culver reported net income after tax of $79,000 and paid dividends of $4,500. Also during 2017, Culver discovered that rent expense in 2016 was understated by $19,100. Rent expense was recorded properly for 2017, Culver was subject to a 20% income tax rate for all affected years. Assuming that Culver reports under ASPE, prepare the December 31, 2017 statement of retained eamings. Culver Ltd. Statement of Retained Earnings

Explanation / Answer

CULVER LTD

STATMENT OF RETAINED EARNINGS 2017

so above is the statment for culver ltd for year 2017

Begining unadjusted retained earnings 479000 Less : Adjustement for prior period unreported rent expenses 19100 Add: Tax impact @ 20% on above ommission 3820 15280 Adjusted reatined earning begining balance 463720 Add: Net income after tax 2017 79000 Total Earning available for distribution 542720 Less: Dividend Paid 4500 Ending retained earning basis for 2017 538220

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