Misclassifcations Roz Corporation's Multiple- Step income statement and retained earnings statement for the year ended December 31,2019 as developed by its bookeeper are shown here:You determine that the account balances listed on the statements are correct but are incorrectly calssified in certain cases. The company laces a 30% tax rate. No shares of common stock were issued or retired during 2019Required:1. Review both statements and indicate where each incorrectly classified item should be classified.2 Preoare a correct multiple - step income statement for 20193. Determine the correct beginning balance in retained earnings and then prepare a correct 2019 retained earnings statement. Revenue StatementDecember 31, 2019$ 179,0002,2407,500)$173,740(19,000)$ 154,740Sales (net)Plus: Income from operations of discontinued Division P (net of $960 income taxes)Less: Dividends declared ($1.50 per common share)Net revenuesLess: Selling expensesGross profitLess: Operating expenses:Interest expenseLoss on sale of Division P (net of $1,200 income tax credit)Cost of goods soldIncome tax expense on income from continuing operationsTolal operating expensesOperating incomeMiscellaneous items:Dividend revenueGeneral and administrafive expensesIncome before unusual itemsUnusual items:Loss on sale of landCorrection of errin last year's income (net of $1,500 income toxes)Net income$ 4,1002,800110,7005,370(122,970)$31,770$ 1,800(24,300)(22,500)$9,270$ (4,800)3,500(1,300)7,970Retained Earnings StatementDecember 31, 2019Beginning retained earningsAdd: Net incomeAdjusted retained earningsLoss: Loss from theft (net of $2,760 income tax credit)Ending retained earnings$62,8507,970$70,820(6,440)$64,380

Financial statements can be defined as the accounting records which tells us about the financial…

Answered: Revenue Statement December 31, 2019 $…

Cornerstones of Financial Accounting

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ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 103.1C: Leverage Cook Corporation issued financial statements at December 31, 2019, that include the...

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Misclassifcations Roz Corporation's Multiple- Step income statement and retained earnings statement for the year ended December 31,2019 as developed by its bookeeper are shown here:

You determine that the account balances listed on the statements are correct but are incorrectly calssified in certain cases. The company laces a 30% tax rate. No shares of common stock were issued or retired during 2019

Required:

1. Review both statements and indicate where each incorrectly classified item should be classified.

2 Preoare a correct multiple - step income statement for 2019

3. Determine the correct beginning balance in retained earnings and then prepare a correct 2019 retained earnings statement.

Revenue Statement
December 31, 2019
$ 179,000
2,240
7,500)
$173,740
(19,000)
$ 154,740
Sales (net)
Plus: Income from operations of discontinued Division P (net of $960 income taxes)
Less: Dividends declared ($1.50 per common share)
Net revenues
Less: Selling expenses
Gross profit
Less: Operating expenses:
Interest expense
Loss on sale of Division P (net of $1,200 income tax credit)
Cost of goods sold
Income tax expense on income from continuing operations
Tolal operating expenses
Operating income
Miscellaneous items:
Dividend revenue
General and administrafive expenses
Income before unusual items
Unusual items:
Loss on sale of land
Correction of errin last year's income (net of $1,500 income toxes)
Net income
$ 4,100
2,800
110,700
5,370
(122,970)
$31,770
$ 1,800
(24,300)
(22,500)
$9,270
$ (4,800)
3,500
(1,300)
7,970
Retained Earnings Statement
December 31, 2019
Beginning retained earnings
Add: Net income
Adjusted retained earnings
Loss: Loss from theft (net of $2,760 income tax credit)
Ending retained earnings
$62,850
7,970
$70,820
(6,440)
$64,380

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