4) 20,000 shares of common stock were issued in 2017 at a price of $15 per share

Question

4) 20,000 shares of common stock were issued in 2017 at a price of $15 per share

Create a Statement of Retained Earnings for both years

31-Dec-17 31-Dec-16 Accounts receivable (net) 275,000 196,500 Accumulated Depreciation 300,000 200,000 Additional Paid in Capital-Common 600,000 400,000 Administrative expenses 371,000 475,000 Bond payable, 10% due 2025 500,000 500,000 Cash 162,000 120,000 Common stock, $2 par 200,000 100,000 Cost of goods sold 1,550,000 1,420,500 Current liabilities 267,000 268,000 Depreciation Expense 100,000 100,000 Dividends on common stock 40,000 40,000 Dividends on preferred stock 12,500 12,500 Gain on Sale of Land 125,000 0 Income tax expense 168,000 118,750 Inventories 417,000 132,500 Long-term investments 299,500 250,000 Temporary Investments 387,000 67,500 Mortgage note payable, 9%, due 2030 600,000 0 Other expense (interest) 98,000 50,000 Other income 48,000 47,500 Preferred $2.00 stock, $50 par 500,000 500,000 Prepaid expenses 27,500 30,000 Property, plant, and equipment 2,775,000 2,100,000 Retained earnings, 1/1 928,500 781,500 Sales 3,415,000 3,062,500 Sales returns and allowances 35,000 22,500 Selling expenses 726,000 723,750 Treasury Stock 40,000 0 In addition to the information above, you also need to know the following: 1) The long-term investments were purchased at cost. 2) The land that was sold had originally cost $325,000 and was sold for $490,000 Cash, 3) Treasury Stock, 5000 shares, were purchased in 2017 for $40,000

4) 20,000 shares of common stock were issued in 2017 at a price of $15 per share

Create a Statement of Retained Earnings for both years

Explanation / Answer

Create a Statement of Retained Earnings for both years

As on 31-dec-2017 As on 31-dec-2016 Beginning retained earnings 928500 781500 Add: Net income 540000 199500 Less: Dividend (52500) (52500) Ending retained earnings 1416000 928500

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