On January 1, 2017 Del-V Company had a retained earnings balance of $206,000. During 2017, the following events occurred: 1. Treasury stock (ordinary) was acquired at a cost of $14,000. The law requires a restriction of retained earnings in an equal amount. The company reports its retained earnings restrictions in a note to the financial statements. 2. Cash dividends totaling $9,000 and share dividends totaling $6,000 were declared and distributed. 3. Net income was $58,000. 4. Two thousand shares of callable preference shares were recalled and retired at a price of $150 per share. This share had originally been issued at $130 per share. 5. A material error in net income for a previous period was corrected. This error correction decreased retained earnings by $12,600 after a related income tax credit of $5,400. Required: 1. Prepare a statement of retained earnings for the year ended December 31, 2017. 2. Prepare a note to disclose the restriction of retained earnings.
On January 1, 2017 Del-V Company had a
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