Accounting 27e Chapter 13 Problem 4PSB How do you find the net income for retained earnings. I don't know where you get the $775,000. Step by step please.

Balances on January 1, 20Y3

Common Stock, $5 stated value (900,000 shares authorized, 620,000 shares issued).......$3,100,000 Paid in Capital in Excess of Stated Value-Common Stock.......$1,240,000 Retained Earnings........$4,875,000 Treasury Stock (48,000 shares at cost of $6 per share)..............$288,000

Transactions occured during the year

Jan15. Paid cash dividends of $0.06 per share ont he common stock. The dividend had been properly recorded when declared on december 1 of the preceeding fiscal year for $34,320

Mar15. Sold all of the treasury stock for $6.75 per share

Apr13. Issued 200,000 shares of common stock for $8 per share

June14. Declared a 3% stock dividend on common stock to be capitalized at the market price of the stock which is $7.50 per share

July 16. Issued the certificates for the dividend declared on June 14

Oct30. Purchased 50,000 shares of treasury stock for $6 per share

Dec30. Declared a $0.08 per share dividend on common stock

Dec.31 Closed the two dividends accounts to retained earnings

Instructions

Enter the January 1 balances in T accoutns for the stockholders equity accounts listed.(Common Stock, Paid in Capital in Excess of stated value common stock, retained earnings, treasury stock) Also prepare T accounts for the following: Paid in Capital from Sale of Treasury Stock, Stock Dividends Distributable, Stock Dividends, Cash Dividends.

Journalize the entries to record the transactions and post to the eight selected accounts

Prepare a retained earnings statement for the year ended December 31, 20Y3

Prepare the stockholders equity section fo the December 31, 20Y3 balance sheet using method 1 of Exhibit 8.

I have figured out everything else I am just struggling with the retained earnings statement and t chart. I dont understand how you get net income from this information. Thank you.

On the retained earnings T chart on the Dec 31 transaction how do you get 775,000 for net income. Step by step explanation please. Thank you.

13 Common stock No ExplanationJourn Ref Debit (S) CreditrS) Balance(S $3,100,000 S3,100,000 $1,000,000 $4,100,000 $123.000 S4.223.000 S4,223,000 2 Date 3 Jan,1 Balance 4 Apr, 13 Issued 5 Jul,16 Issued certificates for divdiend 6 Dec.31 Balance