Declared cash dividends$123,840. Corrected overstatement of 2007 netincome becau

Question

Declared cash dividends$123,840.

Corrected overstatement of 2007 netincome because of depreciation error $22,160.

Earned net income $356,750.

Declared stock dividends$84,710.

Complete the retained earnings statement for the year.(Enter all amounts as positiveand subtract where necessary. List multiple entries from largest tosmallest eg 10, 5, 3, 2.)

For the YearEnded December 31, 2008

$

CASTLECORPORATION RetainedEarnings Statement

For the YearEnded December 31, 2008

Balance, January 1, as reportedNet incomeCorr. for overstmt of 2007 netincomeBalance, January 1, as adjustedCash dividendsStock dividends $ Cash dividendsNet incomeStock dividendsCorr. for overstmt of 2007 netincomeBalance, January 1, as adjustedBalance, January 1, as reported

Balance, January 1, as reportedNet incomeCorr. for overstmt of 2007 netincomeCash dividendsStock dividendsBalance, January 1, as adjusted Add: Balance, January 1, as reportedCorr. for overstmt of 2007 netincomeBalance, January 1, as adjustedCash dividendsNet incomeStock dividends

Less: Stock dividendsNet incomeCash dividendsBalance, January 1, as reportedCorr. for overstmt of 2007 netincomeBalance, January 1, as adjusted $         Corr. for overstmt of 2007 netincomeBalance, January 1, as adjustedStock dividendsBalance, January 1, as reportedNet incomeCash dividends

Balance, December 31

$

Explanation / Answer

The Statement of Retained Earnings would contain these in thefollowing order:                 Balance, January 1, as reported, $579,180              - Corrected overstatement of 2007 net income becauseof depreciation error $22,160             = Balance, January 1, as adjusted $557,020         Add: Net Income,$356,750             = (557,020 + 356,750)        Less: CashDividends   123,840                                   Stock Dividends  84,710                   208,550 (the sum of both dividends)    Balance, December 31 = subtract208, 550 from the balance from before (557,020 + 356,750) Hope this helps!

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