Brief Exercise 4-10 Grouper Corporation has retained earnings of $707,500 at Jan

Question

Brief Exercise 4-10 Grouper Corporation has retained earnings of $707,500 at January 1, 2017. Net income during 2017 was $1,413,400, and cash dividends declared and paid during 2017 totaled $80,900. Prepare a retained earnings statement for the year ended December 31, 2017. Assume an error was discovered: land costing $88,730 (net of tax) was charged to maintenance and repairs expense in 2014. (List items that increase retained earnings first.) GROUPER CORPORATION Retained Earnings Statement LINK TO TEXT LINK TO TEXT

Explanation / Answer

Solution:

Retained Earning Statement For the year ended December 31, 2017 Particulars Amount Retained earnings, Jan 1, 2017 $707,500.00 Add: Land charged to repair and maintenance expense wrongly in prior periods $88,730.00 Adjusted retained earnings on Jan 1, 2017 $796,230.00 Add: Net income for 2017 $1,413,400.00 $2,209,630.00 Less: Cash dividend declared and paid during 2017 $80,900.00 Retained earnings, December 31, 2017 $2,128,730.00

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