alue: 11 points Retained earnings, December 31, 2016 Decrease in total liabiliti

Question

alue: 11 points Retained earnings, December 31, 2016 Decrease in total liabilities during 2016 Gain on the sale of buildings during 2016 Dividends declared and paid in 2016 Proceeds from sale of common stock in 2016 Net income for the year ended December 31, 2016 S504,720 109,920 38,640 10,800 118,560 54,240 Required: From the above data, calculate the retained earnings balance as of December 31, 2015. (Deductible amounts should be indicated by a minus Statement of Stockholders Equity (Partial) For Year Ended December 31, 2016 Retained earnings, December 31, 2015 Add: Dividends Add: Net loss Retained earnings, December 31, 2016

Explanation / Answer

Answer

(b), (c ), (d) figures are already available. (a) can be calculated as---

a + b – c = d
a = d – b + c

Retained earnings Dec 31 2015 = Retained earnings Dec 31 2016 – Net Income 2016 + Dividend declared and paid.

Retained earnings Dec 31 2015 = 504720 – 54240 + 10800 = $ $461280

Retained earnings, Dec 31 2015

461280

Add: Net Income

54240

Less: Dividend paid

10800

Retained earnings, Dec 31 2016

504720

OR

Retained earnings, Dec 31 2016

504720

Less: Net Income

54240

Add: Dividend paid

10800

Retained earnings, Dec 31 2015

461280

Retained earnings, Dec 31 2015

461280

Add: Net Income

54240

Less: Dividend paid

10800

Retained earnings, Dec 31 2016

504720

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