The ledger of Crane Limited at October 31, 2021, contains the following summary data: Cash dividends—common...

The ledger of Crane Limited at October 31, 2021, contains the following summary data:

Cash dividends—common		$128,000
Common shares		653,000
Depreciation expense		100,000
Service revenue		1,474,000
Operating expenses		934,000
Interest expense		63,000
Retained earnings, November 1, 2020		578,000

Your analysis reveals the following additional information:

1.		The company has a 25% income tax rate.
2.		On March 19, 2021, Crane discovered an error made in the previous fiscal year. A $64,000 payment of a note payable had been recorded as interest expense.
3.		On April 10, 2021, common shares costing $84,000 were reacquired for $108,000. This is the first time the company has reacquired common shares.

Prepare a journal entry to correct the prior period error.

Prepare the journal entry to record the reacquisition of common shares

Calculate profit for the year ended October 31, 2021

Prepare the statement of retained earnings for the company for the year ended October 31, 2021.

Solutions

Expert Solution

Please refer the following image for the solution:

ekkarill92 answered 1 year ago

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