Chapter 22, Problem 4E

To determine

Retained earnings: Retained earnings mean the part of profits earned by the company instead of giving it as a dividend, the amount is retained by the company.

• (a)

To prepare: To prepare the comparative Retained Earnings statement starting from 2014.

Given information:

Years	Net income		Retained earnings(ending balance)
	Under FIFO	Under average cost	Under FIFO
2012	100,000	90,000	100,000
2013	70,000	65,000	160,000
2014	90,000	80,000	235,000
2015	120,000	130,000	340,000
2016	300,000	290,000	590,000
2017	305,000	310,000	780,000

To determine

• (b)

To prepare: To prepare the comparative Retained Earnings statement starting from 2017.

To determine

• (c)

To prepare: To prepare the retained earnings statement for the year 2018.

To determine

• (d)

To compute: To compute the net income for the year 2017.