Ayayai Corporation prepares financial statements in accordance with ASPE. At January 1, 2023, the company had retained earnings of
$1,370,000. In 2023, net income was $348,000, and cash dividends of $75,000 were declared and paid.
Prepare a statement of retained earnings for Ayayai Corporation, assuming that in 2023, Ayayai discovered that it had overstated
2020 depreciation by $38,000 (net of tax of $17,000). (List items that increase retained earnings first after adjusted balance.)
Ayayai Corporation
Statement of Retained Earnings
For the Year Ended December 31, 2023
Balance, January 1, as adjusted
Balance, January 1, as reported
Balance, December 31
Correction for Overstatement of Depreciation in 2023 (Net of Tax of $17,000)
Correction for Understatement of Depreciation in 2023 (Net of Tax of $17,000)
Dividends
Net Income/(Loss)
$