Cory Company’s shareholders’ equity on January 1, 2019, is a follows:
In January 2019, Cory recalled and retired the 8% preferred stock. This stock originally had been issued for $105 per share. In April, it declared and issued a 10% stock; dividend on the common stock; the stock was then selling for $16 per share. This was the only issuance of common or preferred stock during the year. During November, Cory reacquired as treasury stock 1,000 shares of its common stock at $18 per share (it uses the cost method for treasury stock). State law requires a restriction of retained earnings equal to the cost of all treasury shares held. Cory discloses this restriction by means of a note to the financial statements. In December, the annual cash dividends on the outstanding preferred stock and a $1 per share cash dividend on the outstanding common stock were declared and paid. At the end of December, net income of $87,000 was closed from Income Summary to Retained Earnings. During the year-end audit, it was found that two errors had been made during 2018 for both financial reporting and income tax reporting. First, depreciation on certain machinery in the amount of $10,000 was inadvertently omitted. Second, a mathematical mistake was made in the calculation of the accumulated depreciation related to the sale of equipment. Consequently, the reduction in accumulated depreciation and the amount of the gain recognized were both understated by $8,000. Roth errors are considered material. Cory has been subject to a 30% income tax rate for the past several years.
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Financial & Managerial Accounting
Accounting Information Systems
Managerial Accounting: The Cornerstone of Business Decision-Making
Corporate Financial Accounting
College Accounting, Chapters 1-27
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College Accounting (Book Only): A Career Approach
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PAYROLL ACCT.,2019 ED.(LL)-TEXT
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Economics (MindTap Course List)
Practical Management Science
Economics For Today
Purchasing and Supply Chain Management
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Cornerstones of Cost Management (Cornerstones Series)
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