Statement of Retained Earnings Landon Corporation was organized on January 2, 20

Question

Statement of Retained Earnings

Landon Corporation was organized on January 2, 2010, with the investment of $100,000 by each of its two stockholders. Net income for its first year of business was $85,200. Net income increased during 2011 to $125,320 and to $145,480 during 2012. Landon paid $20,000 in dividends to each of the two stockholders in each of the three years.

Prepare a statement of retained earnings for the year ended December 31, 2012.

I'd like to understand how you got the answer. I've got part of it right. I know the net income for 2012 is $145,480 and I know the Dividends paid were -40,000. I need the retained earningsJan 1st 2012 and then the Retained earnings Dec 31 2012.

Retained Earnings Jan 1 2012   ?

Net Income 2012   145,480

Dividends paid       -40,000

Retained Earnings Dec 31 2012  ?

Explanation / Answer

Beginning retained earnings January 2012 = net income from 2010 + net income from 2011

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