C Co. reported a retained earnings balance of $200,000 at December 31, 2020. In September 2021, the company found that in back in 2020, the accounting clerk incorrectly expensed 100% of the prepaid insurance premiums of $30,000. The $30,000 prepaid premium corresponds to a three-year coverage period starting on January 1, 2020. C has a 25% income tax rate. What is the corrected balance of the retained earnings as of Jan 1st, 2021? O $210,000 O $215,000. O $220,000. O $222,500,

C Co. reported a retained earnings balance of $200,000 at December 31, 2020. In September 2021, the company found that in back in 2020, the accounting clerk incorrectly expensed 100% of the prepaid insurance premiums of $30,000. The $30,000 prepaid premium corresponds to a three-year coverage period starting on January 1, 2020. C has a 25% income tax rate. What is the corrected balance of the retained earnings as of Jan 1st, 2021? O $210,000 O $215,000. O $220,000. O $222,500,

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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Shannon Corporation began operations on January 1, 2019. Financial statements for the years ended December 31, 2019 and 2020, contained the following errors: In addition, on December 31, 2020, fully depreciated machinery was sold for 10,800 cash, but the sale was not recorded until 2021. There were no other errors during 2019 or 2020, and no corrections have been made for any of the errors. Refer to the information for Shannon Corporation above. Ignoring income taxes, what is the total effect of the errors on the amount of working capital (current assets minus current liabilities) at December 31, 2020? a. working capital overstated by 4,200 b. working capital understated by 5,800 c. working capital understated by 6,000 d. working capital understated by 9,800
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