Rolt Company began 2019 with a $150,000 balance in retained earnings. During the year, the following events occurred: The company earned net income of $79,000. A material error in net income from a previous period was corrected. This error correction increased retained earnings by $7,980 after related income taxes of $3,420. Cash dividends totaling $11,000 and stock dividends totaling $16,000 were declared. One thousand shares of callable preferred stock that originally had been issued at $115 per share were recalled and retired at the beginning of 2019 for the call price of $125 per share. Treasury stock (common) was acquired at a cost of $22,000. 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: Prepare a statement of retained earnings for the year ended December 31, 2019.
Rolt Company began 2019 with a $150,000 balance in retained earnings. During the year, the following events occurred: The company earned net income of $79,000. A material error in net income from a previous period was corrected. This error correction increased retained earnings by $7,980 after related income taxes of $3,420. Cash dividends totaling $11,000 and stock dividends totaling $16,000 were declared. One thousand shares of callable preferred stock that originally had been issued at $115 per share were recalled and retired at the beginning of 2019 for the call price of $125 per share. Treasury stock (common) was acquired at a cost of $22,000. 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: Prepare a statement of retained earnings for the year ended December 31, 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Rolt Company began 2019 with a $150,000 balance in retained earnings. During the year, the following events occurred:
- The company earned net income of $79,000.
- A material error in net income from a previous period was corrected. This error correction increased retained earnings by $7,980 after related income taxes of $3,420.
- Cash dividends totaling $11,000 and stock dividends totaling $16,000 were declared.
- One thousand shares of callable
preferred stock that originally had been issued at $115 per share were recalled and retired at the beginning of 2019 for the call price of $125 per share. Treasury stock (common) was acquired at a cost of $22,000. 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:
Prepare a statement of retained earnings for the year ended December 31, 2019.
| ROLT COMPANY | ||
| Statement of Retained Earnings | ||
| For Year Ended December 31, 2019 | ||
| Retained earnings, as previously reported, January 1, 2019 | $fill in the blank 1 | |
| fill in the blank 3 | ||
| Adjusted retained earnings, January 1, 2019 | $fill in the blank 4 | |
| fill in the blank 6 | ||
| $fill in the blank 7 | ||
| $fill in the blank 9 | ||
| fill in the blank 11 | ||
| fill in the blank 13 | fill in the blank 14 | |
| Retained earnings, December 31, 2019 | $fill in the blank 15 |
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