(Retained Earnings Statement) Eddie Zambrano Corporation began operations on January 1, 2001. During its first 3 years of operations, Zambrano reported net income and declared dividends as follows.

The following information relates to 2004.

Instructions

(a) Prepare a 2004 retained earnings statement for Eddie Zambrano Corporation.

(b) Assume Eddie Zambrano Corp. restricted retained earnings in the amount of $70,000 on December 31, 2004. After this action, what would Zambrano report as total retained earnings in its December 31, 2004, balance sheet?

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Net income Dividends declared 2001 $ 40,000 2002 2003 125,000 160,000 $ -0- 50,000 50,000