Comparative Statements of Retained Earnings for Renn-Dever Corporation were reported as follows for the fiscal years ending December 31, 2019, 2020, and 2021. RENN-DEVER CORPORATION For the Years Ended December 31 2019 Statements of Retained Earnings 2021 2020 Balance at beginning of year Net income (loss) $6,794, 292 $5,464,052 $5,624,552 (160,500) 3,308,700 2,240,900 Deductions: Stock dividend (34,900 shares) Common shares retired, September 30 (110,000 shares) Common stock cash dividends 242,000 212,660 889,950 698,000 Balance at end of year $8,971,042 ş6,794, 292 $5,464,052 At December 31, 2018, paid-in capital consisted of the following: Common stock, 1,855,000 shares at $1 par Paid in capital-excess of par $1,855,000 7,420,000 No preferred stock or potential common shares were outstanding during any of the periods shown. Required: Compute Renn-Dever's earnings per share as it would have appeared in income statements for the years ended December 31, 2019, 2020, and 2021. (Negative amounts should be indicated by a minus sign.) Earnings (Net Loss) per Share Year Numerator Denominator 2019 2020 %3D 2021
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
![Problem 19-9 (Static) EPS from statement of retained earnings [LO19-4, 19-5, 19-6]
Comparative Statements of Retained Earnings for Renn-Dever Corporation were reported as follows for the fiscal years ending
December 31, 2019, 2020, and 2021.
RENN-DEVER CORPORATION
Statements of Retained Earnings
For the Years Ended December 31
2021
2020
2019
Balance at beginning of year
Net income (loss)
$6,794, 292
3,308,700
$5,464,052
2,240,900
$5,624,552
(160,500)
Deductions:
Stock dividend (34,900 shares)
Common shares retired, September 30 (110,000 shares)
Common stock cash dividends
242,000
212,660
698,000
889,950
Balance at end of year
$8,971,042
$6,794, 292
$5,464,052
At December 31, 2018, paid-in capital consisted of the following:
$1,855,000
Common stock, 1,855,000 shares at $1 par
Paid in capital-excess of par
7,420,000
No preferred stock or potential common shares were outstanding during any of the periods shown.
Required:
Compute Renn-Dever's earnings per share as it would have appeared in income statements for the years ended December 31, 2019,
2020, and 2021. (Negative amounts should be indicated by a minus sign.)
Earnings (Net Loss)
per Share
Year
Numerator
Denominator
2019
2020
2021](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1bc7a40b-dffa-4a62-bd66-b416eeb3fe46%2F440f075e-4e72-4bed-9c12-a8a7788a614b%2Fh05t0jm_processed.png&w=3840&q=75)
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