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Contact [7]
3 years ago
8

C Co. reported a retained earnings balance of $200,000 at December 31, 2020. In September 2021, C determined that insurance prem

iums of $30,000 for the three-year period beginning January 1, 2020, had been paid and fully expensed in 2020. C has a 25% income tax rate. What amount should C report as adjusted beginning retained earnings in its 2021 statement of retained earnings
Business
1 answer:
Jet001 [13]3 years ago
3 0

Answer:

C Co.

Adjusted beginning retained earnings in 2021 Statement of Retained Earnings:

$215,000

Explanation:

Reported Retained Earnings balance at December 31, 2020 = $200,000

Prepaid insurance = $30,000 for three years

Insurance Expense for 2020 = $30,000

Insurance Expense for each of the three years = $10,000 ($30,000/3)

Insurance Expense over-expensed by $20,000 ($30,000 - $10,000)

Deferred Tax Liability = $5,000 ($20,000 * 25%)

Therefore, adjusted Retained Earnings = $215,000 ($200,000 + 20,000 - 5,000)

b) The Retained Earnings should have been $220,000 instead of $200,000 and there must be accounted for the deferred tax liability arising from the deduction of the Insurance expense that should have been accounted for in subsequent years.

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Answer:

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Explanation:

The investor pays discounted price for this bond.

We know, Annual Interest = Coupon payment/Market value

Given,

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You also maximize your utility by considering the item which is economica prudent to one needs or want.

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2 years ago
What's your fav video game and why
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You own 200 shares of Loner stock. The firm announced that it will be issuing a dividend of $.20 a share one year from today fol
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value of your total investment income   362.80

Explanation:

The computation of the value of your total investment income in two years is shown below

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The president of a software firm has chosen to implement a differentiation strategy, offering his product in a Software as a Ser
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