Scribd Logo
Upload

Welcome to Scribd!

  • 125 views

    Chapter 5 - Ia3

    Uploaded by

    Xynith Nicole Ramos
    The document contains 5 problems related to preparing statements of changes in equity and retained earnings for various companies. Problem 1 provides a statement of retained earnings for Reliable Company for 2021. Problem 2 provides a statement of retained earnings for Gondola Company for 2021 and details the calculation of adjusted net income. Problem 3 provides comparative income statements and statements of retained earnings for Angola Company for 2022 and 2021. Problem 4 provides a statement of changes in equity for Martha Company for 2021. Problem 5 provides a statement of changes in equity for Carr Company for 2021.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Chapter 5 - Ia3

    Uploaded by

    Xynith Nicole Ramos
    125 views3 pages
    The document contains 5 problems related to preparing statements of changes in equity and retained earnings for various companies. Problem 1 provides a statement of retained earnings for Reliable Company for 2021. Problem 2 provides a statement of retained earnings for Gondola Company for 2021 and details the calculation of adjusted net income. Problem 3 provides comparative income statements and statements of retained earnings for Angola Company for 2022 and 2021. Problem 4 provides a statement of changes in equity for Martha Company for 2021. Problem 5 provides a statement of changes in equity for Carr Company for 2021.

    Original Description:

    Chapter 5 answers

    Original Title

    CHAPTER 5 - IA3

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document contains 5 problems related to preparing statements of changes in equity and retained earnings for various companies. Problem 1 provides a statement of retained earnings for Reliable Company for 2021. Problem 2 provides a statement of retained earnings for Gondola Company for 2021 and details the calculation of adjusted net income. Problem 3 provides comparative income statements and statements of retained earnings for Angola Company for 2022 and 2021. Problem 4 provides a statement of changes in equity for Martha Company for 2021. Problem 5 provides a statement of changes in equity for Carr Company for 2021.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    125 views3 pages

    Chapter 5 - Ia3

    Uploaded by

    Xynith Nicole Ramos
    The document contains 5 problems related to preparing statements of changes in equity and retained earnings for various companies. Problem 1 provides a statement of retained earnings for Reliable Company for 2021. Problem 2 provides a statement of retained earnings for Gondola Company for 2021 and details the calculation of adjusted net income. Problem 3 provides comparative income statements and statements of retained earnings for Angola Company for 2022 and 2021. Problem 4 provides a statement of changes in equity for Martha Company for 2021. Problem 5 provides a statement of changes in equity for Carr Company for 2021.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 3

    CHAPTER 5: STATEMENT OF CHANGES IN EQUITY

    Problem 5-1
    Required: Prepare a statement of retained earnings for 2021
    RELIABLE COMPANY
    Statement of Retained Earnings
    Year ended, December 31, 2021

    Retained earnings –unappropriated, Jan. 1 P 200,000


    Correction of error – prior year overdepreciation 100,000
    Change from FIFO to weighted average - credit 150,000
    Correct beginning balance 450,000
    Net Income 1,300,000
    Retained earnings appropriated for treasury shares 200,000
    Retained earnings appropriated for contingencies (100,000)
    Cash dividends (500,000)
    Retained earnings - December 31 P 1,350,000

    Problem 5 – 2
    Required: Prepare a statement of retained earnings for 2021
    GONDOLA COMPANY
    Statement of Retained Earnings
    Year ended, December 31, 2021

    Retained earnings - January 1 P 2,600,000


    Correction of error:
    Compensation of prior period not accrued (500,000)
    Correction of prior period error - credit 400,000
    Correct beginning balance 2,500,000
    Net income 3,050,000
    Loss on retirement of preference shares (350,000)
    Share dividends (700,000)
    Appropriation for treasury shares (1,000,000)
    Retained earnings - December 31 P 3,500,000

    Unadjusted Net Income P 3,000,000


    Loss from fire (50,000)
    Goodwill impairment (250,000)
    Loss on sale of equipment (200,000)
    Gain om early retirement of bonds payable 100,000
    Gain on life insurance settlement 450,000
    Adjusted net income P 3,050,000

    Problem 5 – 3
    Required: Prepare comparative statements of income and retained earnings
    ANGOLA COMPANY
    Comparative Income Statement
    Year ended December 31, 2022 and 2021

    2022 2021
    Sales P 6,000,000 4,500,000
    Cost of Goods Sold 2,900,000 2,300,000
    Gross Income 3,100,000 2,200,000
    Expenses 1,490,000 1,800,000
    Net Income P 1,610,000 400,000

    ANGOLA COMPANY
    Comparative Statement of Retained earnings
    Year ended December 31, 2022 and 2021

    2022 2021
    Retained Earnings, beg P 1,250,000 P 1,000,000
    Net Income 1,610,000 400,000
    Dividends paid (500,000) (150,000)
    Retained earnings, end P 2,360,000 P 1,250,000

    Problem 5 – 4
    Required: Prepare a statement of changes in equity for the year ended December 31, 2021
    MARTHA COMPANY
    Statement of Changes in Equity
    Year ended December 31, 2021

    Ordinary Share Preference share Share Retained Treasury


    capital capital premium Earnings shares
    Balances, Jan. 1 10,000,000 7,500,000 3,250,000
    Issuance of preference share 5,000,000 400,000
    Reacquiring ordinary shares 320,000
    Issuance of ordinary shares 2,500,000 3,500,000
    Dividends – ordinary shares (2,480,000)
    Retirement of treasury shares 50,000 (160,000)
    Dividends – preference share (450,000)
    Overstatement of prior period – (140,000)
    ending inventory
    Net income . . . 2,250,000 .
    Balance – Dec. 31 12,500,000 5,000,000 11,450,000 2,430,000 160,000

    Problem 5 – 5
    Required: Prepare a statement of changes in equity for 2021
    CARR COMPANY
    Statement of Changes in Equity
    Year ended December 31, 2021
    Ordinary Share Preference share Share Retained Treasury
    capital capital premium Earnings shares
    Balances, Jan. 1 5,150,000 1,800,000 3,590,000 4,000,000 270,000
    Retirement of treasury shares (150,000) (120,000) (270,000)
    Property dividend (750,000)
    Dividend - preference (180,000)
    Overstatement of prior (350,000)
    period income
    Net Income . . . 2,600,000 .
    Balance – Dec. 31 5,000,000 1,800,000 3,470,000 5,320,000 -

    You might also like