MGAB01H3 Lecture Notes - Retained Earnings, Accounting, Financial Statement

Exercise 4-12 Pharoah Corporation began operations on January 1,2014. During its first 3 years of operations, Pharoah reported netincome and declared dividends as follows: Net income Dividendsdeclared 2014 $43,400 $ –0– 2015 131,800 57,500 2016 164,000 52,400The following information relates to 2017. Income before income tax$242,600 Prior period adjustment: understatement of 2015depreciation expense (before taxes) $34,700 Cumulative decrease inincome from change in inventory methods (before taxes) $36,100Dividends declared (of this amount, $34,700 will be paid on January15, 2018) $109,900 Effective tax rate 40 % Prepare a 2017 retainedearnings statement for Pharoah Corporation. (List items thatincrease adjusted retained earnings first.) PHAROAH CORPORATIONRetained Earnings Statement $ : : $ Assume Pharoah Corporationrestricted retained earnings in the amount of $75,260 on December31, 2017. After this action, what would Pharoah report as totalretained earnings in its December 31, 2017, balance sheet? Totalretained earnings $

Kamili Company had the following accounting balances for Year1:

The beginning retained earnings amount does NOT reflect anynecessary adjustments. The correct ENDING retained earnings balanceis which of the following figures?