Question
A company reports the following changes in retained earnings for the year ending December 31, 2023: Retained Earnings, January 1, 2023: $900,000 Net Income for
A company reports the following changes in retained earnings for the year ending December 31, 2023:
- Retained Earnings, January 1, 2023: $900,000
- Net Income for the year: $450,000
- Cash Dividends Declared: $135,000
- Stock Dividends Issued: $67,500 (market value)
- Prior Period Adjustment (correction of an error): $33,750 (increase in earnings)
Calculate the Total Dividends Declared (the sum of cash and stock dividends) and explain their impact on retained earnings. Determine the Ending Retained Earnings as of December 31, 2023, and discuss how retained earnings reflect the company’s reinvested profits.
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
