Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. p14.6a. (lo 2, 3, 4 ) ap the ledger of zug limited

P14.6A. (LO 2, 3, 4 ) AP The ledger of Zug Limited at October 31,...

60.1K

Verified Solution

Question

Accounting

P14.6A. (LO 2, 3, 4 ) AP The ledger of Zug Limited at October 31, 2021, contains the following summary data:

Correct error from prior period; prepare statement of retained earnings.

Cash dividendscommon

$ 120,000

Operating expenses

$929,000

Common shares

650,000

Interest expense

54,000

Depreciation expense

87,000

Retained earnings, November 1, 2020

575,000

Service revenue

1,476,000

Your analysis reveals the following additional information:

1. The company has a 25% income tax rate.

2. On March 19, 2021, Zug discovered an error made in the previous fiscal year. A $57,000 payment of a note payable had been recorded as interest expense.

3. On April 10, 2021, common shares costing $75,000 were reacquired for $97,500. This is the first time the company has reacquired common shares.

Instructions

a. Prepare a journal entry to correct the prior period error.

b. Prepare the journal entry to record the reacquisition of common shares.

c. Calculate profit for the year ended October 31, 2021.

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

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students