Exercise 11-18 Newland Company reported retained earnings at December 31, 2016,

Question

Exercise 11-18

Newland Company reported retained earnings at December 31, 2016, of $314,500. Newland had 201,000 shares of common stock outstanding at the beginning of 2017. The following transactions occurred during 2017.

Prepare a retained earnings statement for 2017. (List items that increase retained earnings first.)

1. An error was discovered. In 2015, depreciation expense was recorded at $73,000, but the correct amount was $45,500. 2. A cash dividend of $0.35 per share was declared and paid. 3. A 10% stock dividend was declared and distributed when the market price per share was $16 per share. 4. Net income was $288,000.

Explanation / Answer

Newland Company

Retained Earnings Statement

For the year ended December 31, 2017

$ $ Balance, January 1 314,500 Net Income for the period 288,000 Correction for understatement of 2015 27,500 Available before distribution 630,000 Cash Dividend ( 201,000 x $ 0.35) (70,350) Stock Dividend ( 201,000 x 10% x $ 16) (321,600) ( 391,950) Balance, December 31 238,050

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.