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Retained earnings

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The following information is based on 2006 account balances:

Total reported income since incorporation $1,500,000
Total cash dividends paid ($800,000)
Cumulative effect of changes in accounting principle ($120,000)
Total stock dividends distributed ($200,000)
Correction of an error, recorded Jan 1 2006 $66,000

What should be the balance of retained earnings at Dec 31, 2006?

a)446,000
b)500,000
c)380,000
d)566,000
explain?

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The response provides steps to compute the Retained earnings.

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Retained earnings

The following information is based on 2006 account balances:

Total reported income since incorporation $1,500,000
Total cash dividends paid ...

Purchase this Solution


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