Black Bulls Company reported a Retained Earnings balance of P150,000 on December 31, 2014. The following occurred during 2015:Net income was P85,000Dividends declared and paid was P60,000An error on the 2013 depreciation expense revealed understatement of P25,000. Tax rate is 25%.How much should be presented as the correct beginning balance of the Retained Earnings account for 2015?How much should be presented as the ending balance of the Retained Earnings account for 2015?

Depreciation expense net of tax = Depreciation expense x (1 - tax rate) = 25000 * (1-0.25) = P18,750

Answered: Black Bulls Company reported a Retained…

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Chapter14: Corporation Accounting

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Problem 20EB: Trumpet and Trombone Manufacturing, Inc. began the year with a retained earnings balance of...

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Black Bulls Company reported a Retained Earnings balance of P150,000 on December 31, 2014. The following occurred during 2015:

Net income was P85,000
Dividends declared and paid was P60,000
An error on the 2013 depreciation expense revealed understatement of P25,000. Tax rate is 25%.

How much should be presented as the correct beginning balance of the Retained Earnings account for 2015?
How much should be presented as the ending balance of the Retained Earnings account for 2015?

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