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Chapter 13: Q6TI (page 697)

Sjostrom, Inc. had beginning retained earnings of \(300,000 on January 1, 2018. During the year, Sjostrom declared and paid \)140,000 of cash dividends and earned $200,000 of net income. Prepare a statement of retained earnings for Sjostrom, Inc. for the year ended December 31, 2018.

Short Answer

Expert verified

The statement of retained earnings for the year ended December 31, 2018, shows the balance of $360,000

Step by step solution

01

Basic Introduction

Retained earnings is the surplus amount of profit remains with the corporation after distributing dividend to the stockholders of the corporation.

02

Statement of retained earnings

Statement of Retained Earnings

December 31, 2018

Retained Earnings, beginning of the year

$300,000

Less: Dividend Paid

($140,000)

Add: Net Income

$200,000

Retained Earnings, ending of the year

$360,000

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