Please see the attachment.
Lee Corporation, a U.S. company, began operations on January 1, 2004.
During its first 3 years of operations, Lee reported net income and declared dividends as follows.
Net income Dividends declared
2004 $ 40,000 $ -0-
2005 125,000 50,000
2006 160,000 50,000
The following information relates to 2007:
Income before income tax $240,000
Prior period adjustment: understatement of 2005 depreciation expense (before taxes) $ 25,000
Cumulative decrease in income from change in inventory methods (before taxes) $ 35,000
Dividends declared (of this amount, $25,000 will be paid on January 15, 2008) $100,000
Effective tax rate 40%
Prepare a statement of changes in owner's equity and accompanying notes appropriate to the section.
Note: Record the necessary journal entries before attempting to calculate other comprehensive income.© BrainMass Inc. brainmass.com October 1, 2020, 11:25 pm ad1c9bdddf
The solution examines the statement of changes in owner's equity for Lee Corporation.