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Preparing a Statement of Retained Earnings

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Company B began 2013 with a $110,000 balance in retained earnings. The following events occurred during the year:

1. Cash dividends of $18,500 were declared.
2. 4,500 shares of callable preferred stock were recalled and retired for a price of $225 per share. The stock was originally issued for $150 per share.
3. Net income was $550,000.
4. A material error in net income for a previous period was corrected. The correction of the error decreased retained earnings by $18,500 after a related income tax.

QUESTION:
Prepare the statement of retained earnings for the year ended 2013, and any note disclosures separately

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Solution Summary

The file provides the statement of retained earnings with note disclosures marked, in Excel.

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Radhika Lakshmi, MPhil
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  • MPhil, Madurai Kamaraj University
  • MCom, Annamalai University
  • IATA, International Air Transport Association
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