Reference no: EM132635723

Question - Holt Company began 2016 with a $145,000 balance in retained earnings. During the year, the following events occurred:

1. The company earned net income of $90,000.

2. A material error in net income from a previous period was corrected. This error correction increased retained earnings by $7,630 after related income taxes of $3,270.

3. Cash dividends totaling $10,500 and stock dividends totaling $16,000 were declared.

4. One thousand shares of callable preferred stock that originally had been issued at $115 per share were recalled and retired at the beginning of 2016 for the call price of $125 per share.

5. Treasury stock (common) was acquired at a cost of $21,000. State law requires a restriction of retained earnings in an equal amount. The company reports its retained earnings restrictions in a note to the financial statements.

Required - Create a statement of retained earnings for the year ended December 31, 2016.