The stockholders\' Equity accounts of Gillikin,, Inc. include the following at M

Question

The stockholders' Equity accounts of Gillikin,, Inc. include the following at May 31, 2008:

Common Stock, $1 par value, $90,000 shares authorized

10,000 shares outstanding 10,000

Additional paid-in capital in excess of par value 19,900

Accumulated other comprehensive income (1,190)

Retained Earnings 77,000

_______

Total Equity $105,710

During 2009, the following transactions occurred

March 15 Declared and Issued cash dividends of $1 per share

May 31 Recorded unrealized loss on available for sale securities of $3,300

May 31 Recorded Net Income of $100,000

Calculate the year-ending balance of retained earnings for May 31, 2009

Explanation / Answer

FOllowing table shows the calculation of ending balance of retained earnings for may 31, 2009:

Beginning retained Earnings 77000 (-) Cash dividend paid $1 x 10000 -10000 (-) Other comprehensive income -3300 (+) Net Inome 100000 Ending retained earnings 163700

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