Moorman Corporation reports the following information:Correction of understatement of depredation expenseIn prior years, net of tax $860,000Dividends declared 640,000Net income 2,000,000Retained earnings, 1/1/14, as reported 4,000,000Moorman should report retained earnings. 1/1/14, as adjusted ata. $3,140,000. b. $4,000,000. c. $4,860,000. d. $6,220,000.

Question

Business

Hamilton

27 April, 02:42

Moorman Corporation reports the following information:Correction of understatement of depredation expenseIn prior years, net of tax $860,000Dividends declared 640,000Net income 2,000,000Retained earnings, 1/1/14, as reported 4,000,000Moorman should report retained earnings. 1/1/14, as adjusted ata. $3,140,000. b. $4,000,000. c. $4,860,000. d. $6,220,000.

+3

Answers (1)

Know the Answer?

Devon Middleton · Answer 1

a. $3,140,000

Explanation:

Given that'

Correction of understatement of depredation expense In prior years, net of tax = $860,000

Dividend declared = $640,000

Net income = $2,000,000

Retained earnings = $4,000,000

Now the adjusted retained earning as on 01.01.2014 is

= Retained earnings - Correction of understatement of depredation expense In prior years, net of tax

= $4,000,000 - $860,000

= $3,140,000

The rest of the item is ignored