The stockholders\' equity account balances of Kay Corporation for 2020 are given

Question

 The stockholders' equity account balances of Kay Corporation for 2020 are given below:                                                           January 1      December 31 Common stock ($12 par, 54,000 shares outstanding) .....   648,000         720,000 Paid-in capital – common stock ........................   540,000         594,000 Treasury stock (10,000 share; $16 cost per share) .....   160,000          36,800 Paid-in capital – treasury stock ......................     5,000            ? Retained earnings .....................................   425,000            ?  During 2020, Kay Corporation entered into the following transactions:  March 23     Re-issued 2,400 of the treasury shares for $13 per share  June 9       Re-issued 3,700 of the treasury shares for $22 per share  August 15    Issued 6,000 shares of previously un-issued common stock  November 2   Re-issued 1,600 of the treasury shares for $14 per share  December 18  Declared and paid a $3.75 dividend per share on the              outstanding shares of common stock  Kay Corporation reported a net income of $293,670 for 2020.  Calculate the balance in the retained earnings account at December 31, 2020

Explanation / Answer

Begning Retained earnings $    425,000.00 Discount on Issue of Treasury Shares(2400*3) $      (7,200.00) Premium on Issue of Treasury Shares(3700*6) $      22,200.00 Discount on Issue of Treasury Shares(1600*2) $      (3,200.00) Dividend (60000*3.75) $ (225,000.00) Net Income $    293,670.00 Ending Retained earnings $    505,470.00

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