Question

The 31 December 20X2 year-end trial balance for Dynamics Ltd., a private company, showed the following account balances:

	Dr./(Cr.)
Retained earnings, 31 December 20X1	$ (8,300,000)
Sales revenue	(9,300,000)
Dividend income from investments	(69,000)
Cost of sales	4,950,000
Impairment on discontinued plant assets, held-for-sale (before tax)	790,000
General, selling, and administrative expenses	1,845,000
Interest expense	104,000
Reduction in prior years’ earnings due to change in accounting policy, cumulative to 31 December 20X1 (before tax)	400,000
Dividends declared, to be paid 15 January 20X3	690,000
Loss due to bankruptcy of major client	180,000

The company pays income tax at a rate of 20%.


Required:
Prepare an income statement for the year ended 31 December 20X2. (Enter answers in thousands, not in whole Canadian dollar.)

Prepare a statement of retained earnings for the year ended 31 December 20X2. (Enter answers in thousands, not in whole Canadian dollar.)

Answer 1

Answer-:

Income statement shows the company's revenue and expenses related to a particular period.

And statement of retained earnings shows the changes in retained earnings during a particular period.

Thankyou..............