Lee Corporation Equity Scenario
Journal Entries
Retained Earnings 15,000
Accumulated Depreciation 15,000
Retained Earnings 21,000
Inventory 21,000
Dividends Declared 100,000
Dividends Payable 100,000
Notes:
1) Retained Earnings of 15,000 was calculated as 40% (tax rate) of the prior period adjustment 25,000.
2) Retained Earnings of 21,000 was calculated as 40% (tax rate) of decrease in income from change in inventory 35,000.
Foreign Exchange Adjustments and Journal
Date Exchange Rate Purchase Price Convert Price
12/31/2005 0.861634 100000 $86,163.40
12/31/2006 0.858885 100000 $85,888.50
12/31/2007 1.012395 100000 $101,239.50