Eddie Zambrano Corporation began operations on January 1, 2011. During its first 3 years of operations
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| E4-12 (Retained Earnings Statement) Eddie Zambrano Corporation began operations on January 1, 2011. During its first 3 years of operations, Zambrano reported net income and declared dividends as follows. | ||||||||||||||||||||
| Year | Net income | Dividends declared | ||||||||||||||||||
| 2013 | $40,000 | $0 | ||||||||||||||||||
| 2014 | 125,000 | 50,000 | ||||||||||||||||||
| 2015 | 160,000 | 50,000 | ||||||||||||||||||
| The following information relates to 2014: | ||||||||||||||||||||
| Income before income taxes | $240,000 | |||||||||||||||||||
| Prior period adjustment: Understatement of 2012 depreciation expense. | ||||||||||||||||||||
| (Before taxes) | $25,000 | |||||||||||||||||||
| Cumulative decrease in income from change in inventory methods (before taxes) | $35,000 | |||||||||||||||||||
| Dividends declared | $100,000 | |||||||||||||||||||
| Of the dividends declared to date, the amount that will be paid on Jan 15, 2015 is: | $25,000 | |||||||||||||||||||
| Effective tax rate | 40% | |||||||||||||||||||
| Instructions: | ||||||||||||||||||||
(a) Prepare a 2014 retained earnings statement for Eddie Zambrano Corporation.
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11 years ago
Eddie Zambrano Corporation began operations on January 1, 2011. During its first 3 years of operations
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e4-12_eddie_zambrano.xls
Eddie Zambrano Corporation began operations on January 1, 2011. During its first 3 years
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