(Solution) - Retained Earning Statement McEntire Corporation began operations -(2025 Original AI-Free Solution)

Paper Details

Retained Earning Statement McEntire Corporation began operations on January 1, 2007. During its first 3 years of operations. McEntire reported net income and declared dividends as follows.

The following information relates to 2010.
Income before income tax............................$220.000
Prior period adjustment: understatement of 2008 depreciation expense (before taxes)....$ 25.000
Cumulative decrease in income from change in inventory methods (before taxes).....$45,000
Dividends declared (of this amount, $25,000 will be paid on Jan. 15, 2011) ......$100,000
Effective tax rate................................20%
Instructions
(a) Prepare a 2010 retained earnings statement for McEntire Corporation.
(b) Assume McEntire Corp, restricted retained earnings in the amount of $70,000 on December 31, 2010. After this action, what would McEntire report as total remained earnings in its December 31, 2010, statement of financialposition?