Rox Corporation s multiple step income statement and

retained earnings statement for #2451

Rox Corporation’s multiple-step income statement and retained earnings statement for the year
ended December 31, 2016, as developed by its bookkeeper, are shown here:Retained Earnings
StatementDecember 31, 2016Beginning retained earnings ............... $62,850Add: Net income
.................... 7,970Adjusted retained earnings ................. $70,820Less: Loss from theft (net of $
2,760 income tax credit) .... (6,440)Ending retained earnings ................. $64,380You determine
that the account balances listed on the statements are correct but are incorrectly classified in
certain cases. The company faces a 30% tax rate. No shares of common stock were issued or
retired during 2016.Required:1. Review both statements and indicate where each incorrectly
classified item should be classified.2. Prepare a correct multiple-step income statement for
2016.3. Determine the correct beginning balance in retained earnings, and then prepare a
correct 2016 retained earnings statement.View Solution:
Rox Corporation s multiple step income statement and retained earnings statement for

ANSWER
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