E4-16 (Comprehensive Income) C. Reither Co. reports the following information fo

Question

E4-16 (Comprehensive Income) C. Reither Co. reports the following information for 2014: sales revenue $700,000; cost of goods sold $500,000; operating expenses $80,000; and an unrealized holding loss on available-for-sale securities for 2014 of $60,000. It declared and paid a cash dividend of $10,000 in 2014.C. Reither Co. has January 1, 2014, balances in common stock $350,000; accumulated other comprehen-sive income $80,000; and retained earnings $90,000. It issued no stock during 2014.Instructions Prepare a statement of stockholders’ equity.

Explanation / Answer

CALCULATION OF THE NET INCOME FROM THE BUSINESS Amount Sales Revenue $                 7,00,000 Less: Cost of Goods Sold $                 5,00,000 Gross Revenue $                 2,00,000 Less:"Operating Expenses $                     80,000 Net Income $                 1,20,000 STATEMENT SHOWING THE RETAINED EARNING VAILABLE Opening Retained Earnings= $                     90,000 Add: Revenue if the year $                 1,20,000 Less: Dividend Declared and paid $                     10,000 Closing balance $                 2,00,000 STOCKHOLDER'S EQUITY AMOUNT Share Capital $                 3,50,000 Retained Earnings $                 2,00,000 Other Comprehensive Income $             80,000 Less: Loss on holding loss on available for sale securities $           -60,000 $                     20,000 Total $                 9,90,000

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