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Chapter 13: Q14SE (page 710)

Preparing a statement of retained earnings

Kingston, Inc. had beginning retained earnings of \(135,000 on January 1, 2018. During the year, Kingston declared and paid \)85,000 of cash dividends and earned $75,000 of net income. Prepare a statement of retained earnings for Kingston, Inc. for the year ending December 31, 2018.

Short Answer

Expert verified

A statement of retained earnings for the year ending December 31, 2018 shows $125,000 ending retained earnings.

Step by step solution

01

Information given

Beginning retained earnings:$135,000

Dividend declared and paid:$85,000

Net Income:$75,000

02

Statement of retained earnings

Statement of Retained Earnings

Beginning retained earnings

$135,000

Less: Dividend paid

($85,000)

Add: Net Income

$75,000

Ending retained earnings

$125,000

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Most popular questions from this chapter

Computing dividends on preferred and common stock and journalizing

Northern Communications has the following stockholders’ equity on December 31,

2018:

Preferred Stock—5%, \(11 Par Value; 150,000 shares authorized, 20,000 shares issued and outstanding

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Paid-In Capital in Excess of Par—Common 680,0006

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Tillman Comfort Specialists, Inc. reported the following stockholders’ equity on its balance sheet at June 30, 2018:

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