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At the beginning of the year, ABC Company had a retained earnings balance of $100,000....

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Accounting

  1. At the beginning of the year, ABC Company had a retained earnings balance of $100,000. During the year, the company discovered that cost of goods sold was understated by $20,000 in 2018. Net income for 2020 is $40,000, the company declared $10,000 in cash dividends to common shareholders and declared a 10% stock dividend when the market price of the stock was $20. The par value of the stock is $5 a share. Assume that there are 50,000 shares of common stock outstanding all year. The company recognized an unrealized loss on available-for-sale securities. Determine the ending balance of retained earnings at December 31, 2020.

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