# Jason Woo Corporation began operations on January 1, 2017. During its first 3 years of operations, Woo reported net income and declared dividends as follows:                                                                                      Net income                 Dividends declared2017                     \$160,000                            \$ –0–2018                         500,000                         200,000                                                                           2019                          640,000                       200,000The following information relates to 2020: Income before income tax\$960,000Prior period adjustment: understatement of 2018 depreciation expense (before taxes)\$100,000Cumulative decrease in income from change in inventory methods (before taxes)\$140,000Dividends declared (of this amount, \$100,000 will be paid on Jan. 15, 2021)\$400,000Effective tax rate20%Prepare a 2020 retained earnings statement for Jason Woo Corporation.Assume Jason Woo Corp. restricted retained earnings in the amount of \$280,000 on December 31, 2020. After this action, what would Woo report as total retained earnings in its December 31, 2020, balance sheet?

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Asked Dec 3, 2019
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Jason Woo Corporation began operations on January 1, 2017. During its first 3 years of operations, Woo reported net income and declared dividends as follows:

 Net income                 Dividends declared 2017                     \$160,000                            \$ –0– 2018                         500,000                         200,000                                                                            2019                          640,000                       200,000 The following information relates to 2020: Income before income tax \$960,000 Prior period adjustment: understatement of 2018 depreciation expense (before taxes) \$100,000 Cumulative decrease in income from change in inventory methods (before taxes) \$140,000 Dividends declared (of this amount, \$100,000 will be paid on Jan. 15, 2021) \$400,000 Effective tax rate 20%
• Prepare a 2020 retained earnings statement for Jason Woo Corporation.
• Assume Jason Woo Corp. restricted retained earnings in the amount of \$280,000 on December 31, 2020. After this action, what would Woo report as total retained earnings in its December 31, 2020, balance sheet?
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Prepare retained earnings statement for Jason Woo Cor...

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