Retained Earnings Statement Rolt Company began 2013 with a 145,000 balance in retained earnings. During...
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Retained Earnings Statement
Rolt Company began 2013 with a 145,000 balance in retained earnings. During the year, the following events occurred:
1. The company earned net income of $75,000.
2. A material error in net income from a previous period was corrected. The error correction increased in retained earning by $7,350 after related income taxes of $3,150.
3. Cash dividents totaling $13,500 and the stock dividents totaling $18,500 were declared.
4. One thousand shares of callable preferred stock that originally had been issued at $105 per share were recalled and retired at the beginning of 2013 for the call price of $110 per share.
5. Treasury stock (common) was aquired at the cost of $18,000. 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.
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