Question Details

Prepare the entry for the prior period 



Ex. 1
Record the following transactions for Tri-State Corporation on the dates indicated.
1.	On March 31, 2014, Tri-State Corporation discovered that Depreciation Expense on equipment for the year ended December 31, 2013, had been recorded twice, for a total amount of $84,000 instead of the correct amount of $42,000.
2.	On June 30, 2014, the company's internal auditors discovered that the April 2014 telephone bill for $3,700 had erroneously been charged to the Interest Expense account.
3.	On August 14, 2014, cash dividends on preferred stock of $150,000 declared on July 1, 2014, were paid.


Ex. 2
The following information is available for Xavier Corporation:
	Retained Earnings, December 31, 2014	$1,500,000
	Net Income for the year ended December 31, 2015	$   200,000

The company accountant, in preparing financial statements for the year ending December 31, 2015, has discovered the following information:
The company's previous bookkeeper, who has been fired, had recorded depreciation expense on equipment in 2013 and 2014 using the double-declining-balance method of depreciation. The bookkeeper neglected to use the straight-line method of depreciation which is the company's policy. The cumulative effects of the error on prior years was $25,000, ignoring income taxes. Depreciation was computed by the straight-line method in 2015.

Instructions
(a)	Prepare the entry for the prior period adjustment.
(b)	Prepare the retained earnings statement for 2015.




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