The Records of a Corporation for Year 3 Reflected the Following

question 52

Essay

The records of a corporation for year 3 reflected the following correct pre-tax amounts: cash dividends declared and paid, $16,000; retained earnings, January 1, year 3, $120,000, correction of accounting error, $10,000 debit; income before income taxes and before extraordinary item, $60,000. The average income tax rate of 40 percent applies to all items except the dividends.
The December 31, year 3 (ending) balance of retained earnings was $________________.

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Definitions:

Agreement

A mutual understanding or arrangement between two or more parties that outlines the terms and conditions of a specific course of action.

Fraud

Intentional deception made for personal gain or to damage another individual.

Voidable Contract

A voidable contract is a legal agreement that may be annulled or declared invalid by one of the parties due to certain defects, while remaining valid until such action is taken.

Result

The outcome or consequence of an action, process, or situation, often measured to determine success or failure.