Central Avenue Company reported net income of P700,000 for the year 2021. The entity declared and paid dividends of P150,000 in 2021 and P300,000 in 2020. In the financial statements for the year ended December 31, 2020, the entity reported retained earnings of P1,500,000 on January 01, 2020. The net income for 2020 was P600,000. In 2021, after the 2020 financial statements were approved for issue, the entity discovered an error in the December 31, 2021 financial statements. The after-tax effect of the error was P420,000 understatement of net income for the year ended December 31, 2020 due to over-depreciation. What amount was reported as retained earnings on December 31, 2020? 1,200,000 1,800,000 1,500,000 2,400,000
Central Avenue Company reported net income of P700,000 for the year 2021. The entity declared and paid dividends of P150,000 in 2021 and P300,000 in 2020. In the financial statements for the year ended December 31, 2020, the entity reported retained earnings of P1,500,000 on January 01, 2020. The net income for 2020 was P600,000. In 2021, after the 2020 financial statements were approved for issue, the entity discovered an error in the December 31, 2021 financial statements. The after-tax effect of the error was P420,000 understatement of net income for the year ended December 31, 2020 due to over-depreciation. What amount was reported as retained earnings on December 31, 2020? 1,200,000 1,800,000 1,500,000 2,400,000
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
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 3P: On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a...
Related questions
Question
Central Avenue Company reported net income of P700,000 for the year 2021. The entity declared and paid dividends of P150,000 in 2021 and P300,000 in 2020. In the financial statements for the year ended December 31, 2020, the entity reported
What amount was reported as retained earnings on December 31, 2020?
- 1,200,000
- 1,800,000
- 1,500,000
- 2,400,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Fundamentals Of Financial Management, Concise Edi…
Finance
ISBN:
9781337902571
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning