Problem 4-6 Below is the Retained Earnings account for the year 2017 for Pronghorn Corp. Retained...

Problem 4-6

Below is the Retained Earnings account for the year 2017 for Pronghorn Corp.

Retained earnings, January 1, 2017		$265,330
Add:
Gain on sale of investments (net of tax)	$48,930
Net income	92,230
Refund on litigation with government, related to the year 2014 (net of tax)	29,330
Recognition of income earned in 2016, but omitted from income statement in that year (net of tax)	33,130	203,620
		468,950
Deduct:
Loss on discontinued operations (net of tax)	42,730
Write-off of goodwill (net of tax)	67,730
Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in 2017 (net of tax)	30,930
Cash dividends declared	39,730	181,120
Retained earnings, December 31, 2017		$287,830

(a) Prepare a corrected retained earnings statement. Pronghorn Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2017 to compute net income. (List items that increase adjusted retained earnings first.)

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Expert Solution

ekkarill92 answered 1 year ago

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