(Retained Earnings Statement, Prior Period Adjustment) Below is the Retained Earnings account for the year 2012 for Acadian Corp.
Retained earnings, January 1, 2012 $257,600
Add:
- Gain on sale of investments (net of tax) $41,200
- Net income 84,500
- Refund on litigation with government, related to the year 2009 (net of tax) 21,600
- Recognition of income earned in 2011, but omitted from income statement in that year (net of tax) 25,400 172,700 430,300
Deduct:
- Loss on discontinued operations (net of tax) 35,000
- Write-off of goodwill (net of tax) 60,000
- Cumulative effect on income of prior years in changing from LIFO to FIFO
- inventory valuation in 2012 (net of tax) 23,200
- Cash dividends declared 32,000 150,200
- Retained earnings, December 31, 2012 $280,100
Instructions
(a) Prepare a corrected retained earnings statement. Acadian Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2012 to compute net income.
(b) State where the items that do not appear in the corrected retained earnings statement should be shown.