Rolt Company began 2016 with a $150,000 balance in retained earnings. During the year, the following events occurred: 1. The company earned net income of $74,000. 2. A material error in net income from a previous period was corrected. This error correction increased retained earnings by $8,470 after related income taxes of $3,630. 3. Cash dividends totaling $15,000 and stock dividends totaling $20,000 were declared. 4. One thousand shares of callable preferred stock that originally had been issued at $110 per share were recalled and retired at the beginning of 2016 for the call price of $120 per share. 5. Treasury stock (common) was acquired at a cost of $16,000. State law requires a restriction of retained earnings in an equal amount. The company reports its retained earmings restrictions in a note to the financial statements. Required: 1. Prepare a statement of retained earnings for the year ended December 31, 2016. ROLT COMPANY Statement of Retained Earnings For Year Ended December 31, 2016 Retained earnings, as previously reported, January 1, 2016 Adjusted retained earnings, January 1, 2016 Retained earnings, December 31, 2016
Rolt Company began 2016 with a $150,000 balance in retained earnings. During the year, the following events occurred: 1. The company earned net income of $74,000. 2. A material error in net income from a previous period was corrected. This error correction increased retained earnings by $8,470 after related income taxes of $3,630. 3. Cash dividends totaling $15,000 and stock dividends totaling $20,000 were declared. 4. One thousand shares of callable preferred stock that originally had been issued at $110 per share were recalled and retired at the beginning of 2016 for the call price of $120 per share. 5. Treasury stock (common) was acquired at a cost of $16,000. State law requires a restriction of retained earnings in an equal amount. The company reports its retained earmings restrictions in a note to the financial statements. Required: 1. Prepare a statement of retained earnings for the year ended December 31, 2016. ROLT COMPANY Statement of Retained Earnings For Year Ended December 31, 2016 Retained earnings, as previously reported, January 1, 2016 Adjusted retained earnings, January 1, 2016 Retained earnings, December 31, 2016
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Retained Earnings Statement
Rolt Company began 2016 with a $150,000 balance in retained earnings. During the year, the following events occurred:
1. The company earned net income of $74,000.
2. A material error in net income from a previous period was corrected. This error correction increased retained earnings by $8,470 after related income taxes of $3,630.
3. Cash dividends totaling $15,000 and stock dividends totaling $20,000 were declared.
4. One thousand shares of callable preferred stock that originally had been issued at $110 per share were recalled and retired at the beginning of 2016 for the call price of $120 per share.
5. Treasury stock (common) was acquired at a cost of $16,000. State 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.
Required:
1. Prepare a statement of retained earnings for the year ended December 31, 2016.
ROLT COMPANY
Statement of Retained Earnings
For Year Ended December 31, 2016
Retained earnings, as previously reported, January 1, 2016
Adjusted retained earnings, January 1, 2016
Retained earnings, December 31, 2016
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