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Presented below are the comparative income and retained eamings statements for Buffalo Inc. for the years 2020 and 2021. 2021 2020 Sales $314,000 $272000 Cost of sales 200,000 147,000 Gross profit 114,000 125.000 Expenses 94.500 52.700 Net income $19,500 $72.300 Retained earnings (Jan. 1) $116,900 $70.700 Net income 19,500 72300 Dividends (27.000 ) (26.100 ) Retained earnings (Dec. 31) $109,400 $116.900 The following additional information is provided: 1. In 2021, Buffalo Inc. decided to switch its depreciation method from sum-of-the-years' digits to the straight-line method. The assets were purchased at the beginning of 2020 for $98.000 with an estimated usefulife of 4 years and no salvage value. (The 2021 income statement contains depreciation expense of $29,400 on the assets purchased at the beginning of 2020) 2. In 2021, the company discovered that the ending inventory for 2020 was overstated by $24,100; ending inventory for 2021 is correctly stated. Prepare the revised retained earnings statement for 2020 and 2021, assuming comparative statements. lignore income taxes) BUFFALO INC. Retained Earnings Statement For the Year Ended 2021 2020

Presented below are the comparative income and retained eamings statements for Buffalo Inc. for the years 2020 and 2021. 2021 2020 Sales $314,000 $272000 Cost of sales 200,000 147,000 Gross profit 114,000 125.000 Expenses 94.500 52.700 Net income $19,500 $72.300 Retained earnings (Jan. 1) $116,900 $70.700 Net income 19,500 72300 Dividends (27.000 ) (26.100 ) Retained earnings (Dec. 31) $109,400 $116.900 The following additional information is provided: 1. In 2021, Buffalo Inc. decided to switch its depreciation method from sum-of-the-years' digits to the straight-line method. The assets were purchased at the beginning of 2020 for $98.000 with an estimated usefulife of 4 years and no salvage value. (The 2021 income statement contains depreciation expense of $29,400 on the assets purchased at the beginning of 2020) 2. In 2021, the company discovered that the ending inventory for 2020 was overstated by $24,100; ending inventory for 2021 is correctly stated. Prepare the revised retained earnings statement for 2020 and 2021, assuming comparative statements. lignore income taxes) BUFFALO INC. Retained Earnings Statement For the Year Ended 2021 2020

Intermediate Accounting: Reporting And Analysis
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
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 1E
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Presented below are the comparative income and retained eamings statements for Buffalo Inc. for the years 2020 and 2021. 2021 2020 Sales $314,000 $272,000 Cost of sales 200,000 147,000 Gross profit 114,000 125,000 Еxpenses 94,500 52,700 Net income $19,500 $72,300 Retained earnings (Jan. 1) $116,900 $70,700 Net income 19,500 72,300 Dividends (27,000 ) (26,100 ) Retained earnings (Dec. 31) $109,400 $116,900 The follawing additional information is provided: In 2021, Buffalo Inc. decided to switch its depreciation method from sum-of-the-years' digits to the straight-line method. The assets were purchased at the beginning of 2020 for $98,000 with an estimated useful life of 4 years and no salvage value. (The 2021 income statement contains depreciation expense of $29,400 on the assets purchased at the beginning of 2020.) 1. In 2021, the company discovered that the ending inventory for 2020 was overstated by $24,100; ending inventory for 2021 is correctly stated. 2. Prepare the revised retained earnings statement for 2020 and 2021, assuming comparative statements. (lgnore income taxes.) BUFFALO INC. Retained Earnings Statement For the Year Ended 2021 2020
Transcribed Image Text:Presented below are the comparative income and retained eamings statements for Buffalo Inc. for the years 2020 and 2021. 2021 2020 Sales $314,000 $272,000 Cost of sales 200,000 147,000 Gross profit 114,000 125,000 Еxpenses 94,500 52,700 Net income $19,500 $72,300 Retained earnings (Jan. 1) $116,900 $70,700 Net income 19,500 72,300 Dividends (27,000 ) (26,100 ) Retained earnings (Dec. 31) $109,400 $116,900 The follawing additional information is provided: In 2021, Buffalo Inc. decided to switch its depreciation method from sum-of-the-years' digits to the straight-line method. The assets were purchased at the beginning of 2020 for $98,000 with an estimated useful life of 4 years and no salvage value. (The 2021 income statement contains depreciation expense of $29,400 on the assets purchased at the beginning of 2020.) 1. In 2021, the company discovered that the ending inventory for 2020 was overstated by $24,100; ending inventory for 2021 is correctly stated. 2. Prepare the revised retained earnings statement for 2020 and 2021, assuming comparative statements. (lgnore income taxes.) BUFFALO INC. Retained Earnings Statement For the Year Ended 2021 2020
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