At December 31, DePaul Corporation had a $16 million balance in its deferred tax asset account and a $68 million balance in its deferred tax liability account

E16-24 (Balance Sheet Classification)

At December 31, DePaul Corporation had a $16 million balance in its deferred tax asset account and a $68 million balance in its deferred tax liability account. The balances were due to the following cumulative temporary differences:

1. Estimated warranty expense, $15 million: expense recorded in the year of the sale; tax-deductible when paid (one-year warranty).
2. Depreciation expense, $120 million: straight-line in the income statement; MACRS on the tax return.
3. Income from installment sales of properties, $50 million: income recorded in the year of the sale; taxable when received equally over the next five years.
4. Bad debt expense, $25 million: allowance method for accounting; direct write-off for tax purposes.

Required:
Show how any deferred tax amounts should be classified and reported in the December 31 balance sheet. The tax rate is 40%.

Click here for the solution: At December 31, DePaul Corporation had a $16 million balance in its deferred tax asset account and a $68 million balance in its deferred tax liability account

The following balance sheet was prepared by the bookkeeper for Purple Company as of December 31, 2011

2. (TCO D) The following balance sheet was prepared by the bookkeeper for Purple Company as of December 31, 2011

Purple Company
Balance Sheet
as of December 31, 2011
Cash $ 80,000 Accounts payable $ 75,000
Accounts receivable (net) 52,200 Long-term liabilities 100,000
Inventories 57,000 Stockholders' equity 218,500
Investments 76,300
Equipment (net) 96,000
Patents 32,000
$393,500 $393,500

The following additional information is provided:
(1) Cash includes the cash surrender value of a life insurance policy $12,000, and a bank overdraft of $2,500 has been deducted.
(2) The net accounts receivable balance includes:
(a) accounts receivable debit balances $60,000;
(b) accounts receivable 0;
(c) allowance for doubtful accounts $3,800.
(3) Inventories do not include goods costing $3,000 shipped out on consignment. Receivables of $3,000 were recorded on these goods.
(4) Investments include investments in common stock, trading $13,000 and available-for-sale $48,300, and franchises $15,000.
(5) Equipment costing $5,000 with accumulated depreciation $4,000 is no longer used and is held for sale. Accumulated depreciation on the other equipment is $40,000.
(6) An unrecorded liability was not recorded on the balance sheet of $2000. Instructions

Prepare a balance sheet in good form (stockholders' equity details can be omitted.)

Click here for the solution: The following balance sheet was prepared by the bookkeeper for Purple Company as of December 31, 2011

The adjusted trial balance of Kobe Repairs on December 31, 2005, follows

Problem 4-3A Preparing trial balances, closing entries, and financial statements

The adjusted trial balance of Kobe Repairs on December 31, 2005, follows:

KOBE REPAIRS
Adjusted Trial Balance
December 31, 2005
No. Account Title Debit Credit
101 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,000
124 Office supplies . . . . . . . . . . . . . . . . . . . . . . . . . 1,200
128 Prepaid insurance . . . . . . . . . . . . . . . . . . . . . . . 1,950
167 Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,000
168 Accumulated depreciation—Equipment . . . . . . . $ 4,000
201 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . 12,000
210 Wages payable . . . . . . . . . . . . . . . . . . . . . . . . . 500
301 S. Kobe, Capital . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
302 S. Kobe, Withdrawals . . . . . . . . . . . . . . . . . . . . . 15,000
401 Repair fees earned . . . . . . . . . . . . . . . . . . . . . . 77,750
612 Depreciation expense—Equipment . . . . . . . . . . 4,000
623 Wages expense . . . . . . . . . . . . . . . . . . . . . . . . . 36,500
637 Insurance expense . . . . . . . . . . . . . . . . . . . . . . . 700
640 Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . 9,600
650 Office supplies expense . . . . . . . . . . . . . . . . . . . 2,600
690 Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . 1,700
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $134,250 $134,250

Required
1. Prepare an income statement and a statement of owner’s equity for the year 2005, and a classified balance sheet at December 31, 2005. There are no owner investments in 2005.
2. Enter the adjusted trial balance in the first two columns of a six-column table. Use columns three and four for closing entry information and the last two columns for a post-closing trial balance. Insert an Income Summary account as the last item in the trial balance.
3. Enter closing entry information in the six-column table and prepare journal entries for them.

Analysis Component
4. Assume for this part only that:
a. None of the $700 insurance expense had expired during the year. Instead, assume it is a prepayment of the next period’s insurance protection.
b. There are no earned and unpaid wages at the end of the year. (Hint: Reverse the $500 wages payable accrual.) Describe the financial statement changes that would result from these two assumptions.

Check (1) Ending capital balance, $47,650
(2) P-C trial balance totals, $64,150

Click here for the solution: The adjusted trial balance of Kobe Repairs on December 31, 2005, follows

Bandung Corporation began 2008 with $92,000 balance in Deferred Tax Liability account

E19-3 (One Temporary difference, Future Taxable Amounts, One Rate, No Beginning Deferred Taxes) Bandung Corporation began 2008 with $92,000 balance in Deferred Tax Liability account. At the end of 2008, the related cumulative difference amounts to $350,000 and it will reverse evenly over the next 2 years. Pretax accounting income for 2008 is $525,000, the tax rate for all years is 40% and taxable income for 2008 is $405,000.

Instructions
a.) Compute income taxes payable for 2008
b.) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2008.
c.) Prepare the income tax expense section of the income statement for 2008 beginning with the line "Income before income taxes"

Click here for the solution: Bandung Corporation began 2008 with $92,000 balance in Deferred Tax Liability account

A partial trial balance of Julie Hartsack Corporation is as follows on December 31, 2008

Exercise 22-19 (E22-19) (Error Analysis; Correcting Entries) A partial trial balance of Julie Hartsack Corporation is as follows on December 31, 2008.

Dr. Cr.
Supplies on hand $ 2,700
Accrued salaries and wages $ 1,500
Interest receivable on investments 5,100
Prepaid insurance 90,000
Unearned rent –0–
Accrued interest payable 15,000

Additional adjusting data:
1. A physical count of supplies on hand on December 31, 2008, totaled $1,100.
2. Through oversight, the Accrued Salaries and Wages account was not changed during 2008. Accrued salaries and wages on December 31, 2008, amounted to $4,400.
3. The Interest Receivable on Investments account was also left unchanged during 2008. Accrued interest on investments amounts to $4,350 on December 31, 2008.
4. The unexpired portions of the insurance policies totaled $65,000 as of December 31, 2008.
5. $28,000 was received on January 1, 2008 for the rent of a building for both 2008 and 2009. The entire amount was credited to rental income.
6. Depreciation for the year was erroneously recorded as $5,000 rather than the correct figure of $50,000.
7. A further review of depreciation calculations of prior years revealed that depreciation of $7,200 was not recorded. It was decided that this oversight should be corrected by a prior period adjustment.

Instructions
(a) Assuming that the books have not been closed, what are the adjusting entries necessary at December 31, 2008? (Ignore income tax considerations.)
(b) Assuming that the books have been closed, what are the adjusting entries necessary at December 31, 2008? (Ignore income tax considerations.)

Click here for the solution: A partial trial balance of Julie Hartsack Corporation is as follows on December 31, 2008

Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007 (the end of its fiscal year)

P2-3A Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007 (the end of its fiscal year).

BYTE REPAIR SERVICE, INC.
Trial Balance
December 31, 2007
Cash $8,000
Accounts Receivable 15,000
Parts Inventory 13,000
Prepaid Rent 3,000
Shop Equipment 21,000
Accounts Payable $19,000
Common Stock 30,000
Retained Earnings 11,000
$60,000 $60,000

Summarized transactions for January 2008 were as follows:
1. Advertising costs, paid in cash, $1,000.
2. Additional repair parts inventory acquired on account $4,000.
3. Miscellaneous expenses, paid in cash, $2,000.
4. Cash collected from customers in payment of accounts receivable $14,000.
5. Cash paid to creditors for accounts payable due $15,000.
6. Repair parts used during January $4,000. (Hint: Debit this to Repair Parts Expense.)
7. Repair services performed during January: for cash $6,000; on account $9,000.
8. Wages for January, paid in cash, $3,000.
9. Dividends paid in January were $3,000.

Instructions
(a) Prepare journal entries to record each of the January transactions.
(b) Open T accounts for each of the accounts listed in the trial balance, and enter the opening balances for 2008. Post the journal entries to the accounts in the ledger.
(c) Prepare a trial balance as of January 31, 2008.

Click here for the solution: Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007

This is the trial balance of Mimosa Company on September 30

P3-6A This is the trial balance of Mimosa Company on September 30.

MIMOSA COMPANY
Trial Balance
September 30, 2012
Debit Credit
Cash $ 8,200
Accounts Receivable 2,600
Supplies 2,100
Equipment 8,000
Accounts Payable $ 4,800
Unearned Service Revenue 1,100
Common Stock 15,000
$20,900 $20,900

The October transactions were as follows.
Oct. 5 Received $1,300 in cash from customers for accounts receivable due.
10 Billed customers for services performed $5,100.
15 Paid employee salaries $1,200.
17 Performed $600 of services for customers who paid in advance in August.
20 Paid $1,900 to creditors for accounts payable due.
29 Paid a $300 cash dividend.
31 Paid utilities $400.

Instructions
(a) Prepare a general ledger using T accounts. Enter the opening balances in the ledger accounts as of October 1. Provision should be made for these additional accounts: Dividends, Service Revenue, Salaries and Wages Expense, and Utilities Expense.
(b) Journalize the transactions, including explanations.
(c) Post to the ledger accounts.
(d) Prepare a trial balance on October 31, 2012.

Click here for the solution: This is the trial balance of Mimosa Company on September 30

The trial balance columns of the worksheet for Briscoe Company at June 30, 2008, are below

E4-1 The trial balance columns of the worksheet for Briscoe Company at June 30, 2008, are below.

Other data:
A physical count reveals $300 of supplies on hand.
$100 of the unearned revenue is still unearned at month-end.
Accrued salaries are $280.

Instructions
Complete the worksheet

Click here for the solution: The trial balance columns of the worksheet for Briscoe Company at June 30, 2008, are below

Emil Skoda Company had the following adjusted trial balance

E4-7 Emil Skoda Company had the following adjusted trial balance.

EMIL SKODA COMPANY
Adjusted Trial Balance
June 30, 2008

Adjusted Trial Balance
Account Titles Debits Credits
Cash $3,712
Accounts Receivable 3,904
Supplies 480
Accounts Payable $1,792
Unearned Revenue 160
Common Stock 5,000
Retained Earnings 760
Dividends 300
Service Revenue 4,064
Salaries Expense 1,344
Miscellaneous Expense 256
Supplies Expense 2,228
Salaries Payable 448
$12,224 $12,224

Instructions
(a) Prepare closing entries at June 30, 2008.
(b) Prepare a post-closing trial balance.

Click here for the solution: Emil Skoda Company had the following adjusted trial balance

The agreement under which Patterson, Inc., issued its long-term debt requires the restriction of $200,000 of the company's retained earnings balance

The agreement under which Patterson, Inc., issued its long-term debt requires the restriction of $200,000 of the company's retained earnings balance. Total retained earnings is $250,000 and total paid in capital is $500,000.

Required
Show how to report stockholder's equity on Patterson's balance sheet, assuming the following:
A. Patterson discloses the restrictions in a note. Write the note.
B. Patterson appropriates retained earnings in the amount of the restriction and includes no note in its statements.
C. Patterson's cash balance is $100,000. What is the maximum amount of dividends Patterson can declare?

Click here for the solution: The agreement under which Patterson, Inc., issued its long-term debt requires the restriction of $200,000 of the company's retained earnings balance

Garza Company expects to have a cash balance of $46,000 on January 1, 2008

ACC 560 Week 6 Assignment

E9-12 Garza Company expects to have a cash balance of $46,000 on January 1, 2008. Relevant monthly budget data for the first 2 months of 2008 are as follows.

Collections from customers: January $85,000, February $150,000.
Payments for direct materials: January $50,000, February $70,000.
Direct labor: January $30,000, February $45,000. Wages are paid in the month they are incurred.
Manufacturing overhead: January $21,000, February $25,000. These costs include depreciation of $1,000 per month. All other overhead costs are paid as incurred.
Selling and administrative expenses: January $15,000, February $20,000. These costs are exclusive of depreciation. They are paid as incurred.

Sales of marketable securities in January are expected to realize $10,000 in cash. Garza Company has a line of credit at a local bank that enables it to borrow up to $25,000. The company wants to maintain a minimum monthly cash balance of $20,000.

Instructions
Prepare a cash budget for January and February.

Click here for the solution: Garza Company expects to have a cash balance of $46,000 on January 1, 2008

The current sections of Bellinham Inc.'s balance sheets at December 31, 2007 and 2008, are presented here

ACC 560 Week 9 Assignment

E13-5 The current sections of Bellinham Inc.'s balance sheets at December 31, 2007 and 2008, are presented here.

Bellinham's net income for 2008 was $153,000. Depreciation expense was $24,000.

2008 2007
Current assets
Cash $105,000 $99,000
Accounts receivable 110,000 89,000
Inventory 158,000 172,000
Prepaid expenses 27,000 22,000
Total current assets $400,000 $382,000

Current liabilities
Accrued expenses payable $15,000 $5,000
Accounts payable 85,000 92,000
Total current liabilities $100,000 $97,000

Instructions
Prepare the net cash provided by operating activities section of the company's statement of cash flows for the year ended December 31, 2008, using the indirect method.


Click here for the solution: The current sections of Bellinham Inc.'s balance sheets at December 31, 2007 and 2008, are presented here

Scully Corporation's comparative balance sheets are presented below

ACC 560 Week 9 Assignment

E13-7 Scully Corporation's comparative balance sheets are presented below.

SCULLY CORPORATION
Comparative Balance Sheets
December 31
2008 2007
Cash $14,300 $10,700
Accounts receivable 21,200 23,400
Land 20,000 26,000
Building 70,000 70,000
Accumulated depreciation (15,000) (10,000)
Total $110,500 $120,100

Accounts payable $12,370 $31,100
Common stock 75,000 69,000
Retained earnings 23,130 20,000
Total $110,500 $120,100

Additional information:
1. Net income was $22,630. Dividends declared and paid were $19,500.
2. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $4,900.
3. Prepare a statement of cash flows for 2008 using the indirect method.


Click here for the solution: Scully Corporation's comparative balance sheets are presented below

The comparative condensed balance sheets of Conard Corporation are presented below

ACC 291 Week 5 Assignment

E14-3 The comparative condensed balance sheets of Conard Corporation are presented below.

CONARD CORPORATION
Comparative Condensed Balance Sheets
December 31
Assets
Current assets $ 74,000 $ 80,000
Property, plant, and equipment (net) 99,000 90,000
Intangibles 27,000 40,000
Total assets $200,000 $210,000

Liabilities and stockholders’ equity
Current liabilities $ 42,000 $ 48,000
Long-term liabilities 143,000 150,000
Stockholders’ equity 15,000 12,000
Total liabilities and stockholders’ equity $200,000 $210,000

Instructions
1. Prepare a horizontal analysis of the balance sheet data for Conard Corporation using 2011 as a base.
2. Prepare a vertical analysis of the balance sheet data for Conard Corporation in columnar form for 2012.

Click here for the solution: The comparative condensed balance sheets of Conard Corporation are presented below

The following is a December 31, 2011, post-closing trial balance for the Vosburgh Electronics Corporation

P 3-6 Balance sheet preparation; disclosures

The following is a December 31, 2011, post-closing trial balance for the Vosburgh Electronics Corporation.

Account Title Debits Credits
Cash $ 68,000
Short-term investments 184,000
Accounts receivable 124,600
Long-term investments 35,800
Inventories 215,900
Loans to employees 40,700
Prepaid expenses (for 2012) 16,600
Land 299,000
Building 1,564,000
Machinery and equipment 652,000
Patent 115,000
Franchise 56,000
Note receivable 285,000
Interest receivable 12,300
Accumulated depreciation — building $ 607,000
Accumulated depreciation — equipment 201,000
Accounts payable 188,200
Dividends payable (payable on 1/16/12) 24,000
Interest payable 14,700
Taxes payable 39,200
Unearned revenue 43,000
Notes payable 273,000
Allowance for uncollectible accounts 6,500
Common stock 2,000,000
Retained earnings 272,300
Totals $ 3,668,900 $ 3,668,900

Additional information:
1. The common stock represents 1 million shares of no par stock authorized, 500,000 shares issued and outstanding.
2. The loans to employees are due on June 30, 2012.
3. The note receivable is due in installments of $50,000, payable on each September 30. Interest is payable annually.
4. Short-term investments consist of marketable equity securities that the company plans to sell in 2012 and $50,000 in treasury bills purchased on December 15 of the current year that mature on February 15, 2012. Long-term investments consist of marketable equity securities that the company does not plan to sell in the next year.
5. Unearned revenue represents customer payments for extended service contracts. Eighty percent of these contracts expire in 2012, the remainder in 2013.
6. Notes payable consists of two notes, one for $100,000 due on January 15, 2013, and another for $200,000 due on June 30, 2014.

Required:
1. Prepare a classified balance sheet for Vosburgh at December 31, 2011.
2. Identify the items that would require additional disclosure, either on the face of the balance sheet or in a disclosure note.


Click here for the solution: The following is a December 31, 2011, post-closing trial balance for the Vosburgh Electronics Corporation

The following trial balance was taken from the records of Wheaton Manufacturing Company at the beginning of 2012

11-18A The following trial balance was taken from the records of Wheaton Manufacturing Company at the beginning of 2012.

Cash 9,400
Raw Material inventory $750
Work in process inventory $1,200
Finished goods inventory $2,100
Property, plant, and equip.$7,500
Accumulated depreciation $3,000
Common Stocks $7,800
Retained earnings $10,150
Total $20,950 $20,950

a. Open T-accounts with the beginning balance shown from the list above and record all transactions for the year including closing entries in the t-account
b. Prepare a schedule of cost of goods manufactured and sold, and income statement, and balance sheet.
1. Wheaton Purchased $5,700 of direct raw materials and $300 of indirect raw material on account. The indirect materials are capitalized in the Production Supplies account. Materials requisitions showed that $5,400 of direct raw materials had been used for production during the period. The use of indirect materials is determined at the end of the year by physically counting the supplies on hand.
2. By the end of the year, $5,250 of the accounts payable had been paid in cash
3. During the year. direct labor amounted to 950 hours recorded in the wages payable account at $10.50 per hour
4. By the end of the year $9,000 of wages payable had been in cash
5. At the beginning of the year, the company expected overhead cost for the period to be $6,300 and 1,000 direct labor hours to be worked. Overhead is allocated based on direct labor hours, which as indicated in event 3 amounted to 950 for the year.
6. Selling and administrative expense for the year amounted to $900 paid in cash
7. Utilities and rent for production facilities amounted to $4,650 paid in cash
8. Depreciation on the plant and equip. used in production amounted to $1,500
9. There was $12,000 of goods completed during the year
10. There was $12,750 of finished goods inventory sold for $18,000 cash
11. A count of the production supplies revealed a balance of $89 on hand at the end of the year
12. Any over or under-applied overhead is considered to be insignificant.


Click here for the solution: The following trial balance was taken from the records of Wheaton Manufacturing Company at the beginning of 2012

The comparative balance sheet of Flack Inc for December 31, 2013 and 2012 is shown as follows

PR 16-1A The comparative balance sheet of Flack Inc for December 31, 2013 and 2012 is shown as follows:

Assets:
Dec 31, 2013 Dec 2012
Cash $234,660 $219,720
Accounts receivables 85,440 78,360
Inventories 240,660 231,420
Investments 0 90,000
Land 123,000 0
Equipment 264,420 207,420
Accumulated Depreciation-Equipment (62,400) (55,500)
885,780 771,420

Liabilities and Stockholders’ Equity
Accounts payable (merchandise creditor) 159,180 151,860
Accrued expenses payable (operations expenses) 15,840 19,740
Dividends payable 9,000 7,200
Common stock $1 par 48,000 36,000
Paid in capital excess of par-common stock 180,000 105,000
Retained earnings 473,760 451,620
885,780 771,420

The following additional information was taken from the records:
a. The investments were sold for $105,000 cash.
b. Equipment and land were acquired for cash.
c. There was no disposal of equipment during the year.
d. Common stock was issued for cash.
e. There was a $58,140 credit to retained earnings for net income.
f. There was a $36,000 debit to retained earnings for cash dividends declared.

Instructions
Prepare a statement of cash flows using the indirect method of presenting cash flows from operating activities


Click here for the solution: The comparative balance sheet of Flack Inc for December 31, 2013 and 2012 is shown as follows

The following are two specific balance-related audit objectives in the audit of accounts payable

Auditing P 6-29 The following are two specific balance-related audit objectives in the audit of accounts payable. The list referred to is the list of accounts payable taken from the accounts payable master file. The total of the list equals the accounts payable balance on the general ledger.

1. All accounts payable included on the list represent amounts due to valid vendors.
2. There are no unrecorded accounts payable.

Required:
a. Explain the difference between these two specific balance-related audit objectives.
b. Which of these two specific balance-related audit objectives applies to the general balance-related audit objective of existence, and which one applies to completeness?
c. For the audit of accounts payable, which of these two specific balance-related audit objectives is usually be more important? Explain.


Click here for the solution: The following are two specific balance-related audit objectives in the audit of accounts payable

The following information is available to reconcile Style Co.’s book balance of cash with its bank statement cash balance as of December 31, 2005

Problems 8-4B

The following information is available to reconcile Style Co.’s book balance of cash with its bank statement cash balance as of December 31, 2005:

a. After posting is complete, the December 31 cash balance according to the accounting records is $31,743.70, and the bank statement cash balance for that date is $45,091.80.
b. Check No. 1273 for $1,084.20 and Check No. 1282 for $390.00, both written and entered in the accounting records in December, are not among the canceled checks. Two checks, No. 1231 for $2,289.00 and No. 1242 for $370.50, were outstanding on the most recent November 30 reconciliation. Check No. 1231 is listed with the December canceled checks, but Check No. 1242 is not.
c. When the December checks are compared with entries in the accounting records, it is found that Check No. 1267 had been correctly drawn for $2,435 to pay for office supplies but was erroneously entered in the accounting records as $2,453.
d. Two debit memoranda are enclosed with the statement and are unrecorded at the time of the reconciliation. One debit memorandum is for $749.50 and dealt with an NSF check for $732 received from a customer, Titus Industries, in payment of its account. The bank assessed a $17.50 fee for processing it. The second debit memorandum is a $79.00 charge for check printing. Style did not record these transactions before receiving the statement.
e. A credit memorandum indicates that the bank collected $20,000 cash on a note receivable for the company, deducted a $20 collection fee, and credited the balance to the company’s Cash account. Style did not record this transaction before receiving the statement.
f. Style’s December 31 daily cash receipts of $7,666.10 were placed in the bank’s night depository on that date, but do not appear on the December 31 bank statement.

Required
1. Prepare the bank reconciliation for this company as of December 31, 2005.
2. Prepare the journal entries necessary to bring the company’s book balance of cash into conformity with the reconciled cash balance as of December 31, 2005.
Analysis Component
3. Explain the nature of the communications conveyed by a bank when the bank sends the depositor (a) a debit memorandum and (b) a credit memorandum.

Check (1) Reconciled balance, $50,913.20; (2) Cr. Note Receivable $20,000


Click here for the solution: The following information is available to reconcile Style Co.’s book balance of cash with its bank statement cash balance as of December 31, 2005

The balance in retained earnings on January 1, 2010, for Persinger Inc, was $800,000

The balance in retained earnings on January 1, 2010, for Persinger Inc, was $800,000. During the year, the corporation paid cash dividends of $90,000 and distributed a stock dividend of $8,000. In addition, the company determined that it had understated its depreciation expense in prior years by $50,000. Net income for 2010 was $120,000.

Prepare retained earnings statement for 2010.


Click here for the solution: The balance in retained earnings on January 1, 2010, for Persinger Inc, was $800,000