Prepare a statement of retained earnings for the year ended

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Reference no: EM131970729

Problem

Retained Earnings Statement

Rolt Company began 2016 with a $120000 balance in retained earnings. During the year, the following events occurred:

The company earned net income of $89000.

A material error in net income from a previous period was corrected. This error correction increased retained earnings by $8890 after related income taxes of $3810.

Cash dividends totaling $14500 and stock dividends totaling $18000 were declared.

One thousand shares of callable preferred stock that originally had been issued at $110 per share were recalled and retired at the beginning of 2016 for the call price of $115 per share.

Treasury stock (common) was acquired at a cost of $16000. 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:

1. Prepare a statement of retained earnings for the year ended December 31, 2016.

Reference no: EM131970729

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