PROBLEM 2 (6 points) Hart Corporation reported retained earnings at December 31,

Question

PROBLEM 2 (6 points) Hart Corporation reported retained earnings at December 31, 2016, of $280,000. It had 200,000 shares of common stock outstanding throughout 2017. The following transactions occurred during 2017. 1) 2) 3) Net income was $320,000. A cash dividend of $0.40 per share was declared and paid. A 7% stock dividend was declared and distributed to common stockholders when the market price per share was $16 per shares. A cash dividend of $0.50 per share was declared and paid. 4) Instructions: Prepare a retained earnings statement for 2017.

Explanation / Answer

Prepare retained earnings statement :

Beginning retained earnings 280000 Add: Net income 320000 Less: Cash dividend -187000 Less: Stock dividend -224000 -411000 Ending retained earnings 189000

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