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15 September, 03:22

At January 1, 2017, Crane Company reported retained earnings of $2,190,000. In 2017, Crane discovered that 2016 depreciation expense was understated by $382,000. In 2017, net income was $929,000 and dividends declared were $226,000. The tax rate is 35%. Prepare a 2017 retained earnings statement for Crane Company.

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  1. 15 September, 03:42
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    Solution and Explanation:

    The retained earning statement for the company Crane for the year 2017 is as follows:

    Martinez Company

    Retained Earnings Statement

    For the Year Ended December 31, 2017

    Retained Earnings, January 1 $2,190,000

    Less: Correction of Depreciation Error $382000

    Retained Earnings, January 1, as adjusted $1,808000

    Add: Net Income $929000

    Less: Dividends $226000

    Retained Earnings, December 31 $2,511000

    Retained earnings at the starting year is to be considered and depreciation and dividend amount is to be deducted whereas the net income is to be added.
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