Below is the Retained Earnings account for the year 2014 for Acadian Corp.\nRetained earnings, January 1, 2014 $257,600\nAdd:\nGain on sale of investment
Below is the Retained Earnings account for the year 2014 for Acadian Corp.
\r\nRetained earnings, January 1, 2014 $257,600
\r\nAdd:
\r\nGain on sale of investments (net of tax) $41,200
\r\nNet income 84,500
\r\nRefund on litigation with government, related to the year 2011
\r\n(net of tax) 21,600
\r\nRecognition of income earned in 2013, but omitted from income statement in that year (net of tax) 25,400 172,700
\r\n430,300
\r\nDeduct:
\r\nLoss on discontinued operations (net of tax) 35,000
\r\nWrite-off of goodwill (net of tax) 60,000
\r\nCumulative effect on income of prior years in changing from
\r\nLIFO to FIFO inventory valuation in 2014 (net of tax) 23,200
\r\nCash dividends declared 32,000 150,200
\r\nRetained earnings, December 31, 2014 $280,100
\r\nInstructions
\r\n(a) Prepare a corrected retained earnings statement. Acadian Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2014 to compute net income.
\r\n(b) State where the items that do not appear in the corrected retained earnings statement should be shown.