Question
A. On January 1, Katie Inc.had Retained Earnings of $650,000. During the year, Katie Inc. had the following selected transactions: declared cash dividends of $100,000;
A. On January 1, Katie Inc.had Retained Earnings of $650,000. During the year, Katie Inc. had the following selected transactions: declared cash dividends of $100,000; corrected overstatement of prior year net income because of depreciation error of $50,000; earned net income of $400,000; and declared stock dividends of $50,000. The ending balance for Retained Earnings is............
B. Katie Inc. reported net income of $171,000 for the current year and paid dividends of $26,000 on common stock. It also has 10,000 shares of 6%, $100 par value, noncumulative preferred stock outstanding. Common stockholders equity was $1,200,000 on January 1 and $1,600,000 on December 31. The companys return on common stockholders equity for the current year is........
C. Katie Inc. & Topaz Sisters had Retained Earnings of $10,000 on the balance sheet but disclosed in the footnotes that $2,000 of Retained Earnings was restricted for plant expansion and $1,000 was restricted for bond repayments. Cash of $2,000 had been set aside for the plant expansion. How much of Retained Earnings is available for Dividends?..............
Please show your work & explain. Thanks.
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