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Law Incorporation
1 month ago
13

Tuscan Inc. had a retained earnings balance of $60,000 at December 31, 2018. During the year, Tuscan had the following selected

transactions. Reported net income of $100,000. Revised an estimate of a machine’s salvage value. Depreciation increased by $1,000 per year. An error was discovered. Three years ago, a purchase of a building was incorrectly expensed. The effect is understated retained earnings of $12,000 (net of tax benefit). Paid cash dividends of $33,000. Calculate the retained earnings balance at December 31, 2019. (Amounts to be deducted should be indicated with a minus sign.)
Business
1 answer:
Katen [2.9K]1 month ago
4 0

Answer:

$139,000

Explanation:

The calculation for the retained earnings as of December 31, 2019 is outlined below:

= Beginning retained earnings + yearly depreciation + net income - cash dividends paid

= $60,000 + $12,000 + $100,000 - $33,000

= $139,000

The annual depreciation is calculated as

= $1,000 × 12 months

= $12,000

Essentially, we utilized the formula above to find the final balance

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