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Chapter 4- Error Practice On January 1,2020, Strong Inc. posted a repair expense...

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Accounting

Chapter 4- Error Practice
On January 1,2020, Strong Inc. posted a repair expense bill of $90,000 to the land account instead of the repair expense account. You are the new accountant for this business and you are in the process of preparing the 2022 financial statements when you notice that the $90,000 expenditure was recorded incorrectly in 2020. The tax rate is 35%. The unadjusted balance in retained earnings at January 1,2022 was $500,000. The company had a net income of $250,000 and paid dividends of $25,000 during 2022.
Required:
a) Calculate the earnings correction that Strong must show in the 2022 financial statements.
b) Prepare the 2022 entry to record the correction of the 2020 error.
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