ABC Co. reported a retained earnings balance of P400,000 at December 31, 20x1. In August 20x2, ABC determined that insurance premiums of P90,000 for the three-year period beginning January 1, 20x1, had been paid and fully expensed in 20x1. ABC has a 30% income tax rate. What amount should ABC report as adjusted beginning retained earnings in its 20x2 statement of retained earnings?

ABC Co. reported a retained earnings balance of P400,000 at December 31, 20x1. In August 20x2, ABC determined that insurance premiums of P90,000 for the three-year period beginning January 1, 20x1, had been paid and fully expensed in 20x1. ABC has a 30% income tax rate. What amount should ABC report as adjusted beginning retained earnings in its 20x2 statement of retained earnings?

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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