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

ID: 2515100 • Letter: E

Question

Exercise 11-18 Newland Company reported retained eamings at December 31, 2016, of $306,500. 1. Newland had 196,500 shares of common stock outstanding at the beginning of 2017, The following transactions occuned during 2012 An error was discovered. In 201S, depreciation expense was recorded at $74,500, but the correct amount was $53,500 A cash dividend of so.s0 per share was declared and paid 2. 3. A10% stock dividend was declared and distrbuted when the minet prer er hare wil lister var. 4 Net income was $283,000. Prepare a retained earnings statement for 2017. (List items that increase retained earnings first. Question Attemptsi 0 ef 3 u

Explanation / Answer

Answer:

Newland company

Retained Earning Statement

balance January 1,as reported

306500

Correction for understatement for 2015 income
(74500-53500)

21000

balance January 1,as adjusted

327500

Add : Income/loss

283000

610500

less:

Cash Dividend (196500*0.50)

-98250

Stock Dividend (196500*10%*15)

-294750

-393000

balance -decmber,31

217500