On January 1, 2015, Eddy Corporation had retained earnings of $571,960. During t

ID: 2527915 • Letter: O

Question

On January 1, 2015, Eddy Corporation had retained earnings of $571,960. During the year, Eddy had the following selected transactions. 1. Declared cash dividends $125,860. 2. Corrected overstatement of 2014 net income because of depreciation error $44,330. 3. Earned net income $343,550. 4. Declared stock dividends $63,420. Prepare a retained earnings statement for the year. (List items that increase retained earnings first.) EDDY CORPORATION Retained Earnings Statement For the Year Ended December 31, 2015 $ : : $ $

Explanation / Answer

Retained Earnings Statement For the Year Ended December 31, 2015

Retained earnings on January 1, 2015

571960

Add:

Net income earned in 2015

343550

Subtotal

915510

Less:

Cash dividend declared in 2015

125860

Overstatement of net income

44330

Stock dividend declared in 2015

63420

Retained Earnings on December 31, 2015

681900