Question

Presented below is information related to Nash Corp. for the year 2020. Net sales $1,066,000 Write-off of inventory due to obsolescence $65,600 Cost of goods sold 639,600 Depreciation expense omitted by accident in 2019 45,100 Selling expenses 53,300 Casualty loss 41,000 Administrative expenses 39,360 Cash dividends declared 36,900 Dividend revenue 16,400 Retained earnings at December 31, 2019 803,600 Interest revenue 5,740 Effective tax rate of 20% on all items Prepare a separate retained earnings statement for 2017. (List items that increase adjusted retained earnings first.) CHEYENNE CORP. Retained Earnings Statement For the Year Ended December 31, 2017 Retained Earnings, January 1, as reported Correction for Overstatement of Net Income in Prior Period Retained Earnings, January 1, as adjusted Add:Net Income/(Loss) Less . Dividends Declared Retained Earnings, December 31

Answer 1

Answer:

Retained earning at the end= 1140292

Explanation:

To calculate retained earning statement we net profit or loss for this statement.

                                 Nash corp

                              Profit & loss statment

Sales                                                                                         =1066,000

less:Cost of goods sold (639600-65600)                               =(574000)

                                                                                                      492,000

less: Selling and administrative expense (53300+39360)     = (92660)

               Gross profit                                                                    399,340

Add: Dividend revenue                                                            =    16400

                   Profit before tax     (a.)                                                 415740

Tax (415740@20%)                                                                     = 83148

less: deduction of casualty loss                                                 =(41000)

            (b.) Tax liability                                                                     42148

            Profit after tax a-b                                                       =373592

                                         Nash corp

                                   Statement of retained earning    

Retanied eaning   (opening)                                                   =803600

less: Dividend declared                                                           =(36900)    

                                                                                                    766700

Add:Profit                                                                                    =373592

                       Retained earning at end                                      1140,292