Comparative Retained Earnings Statement For the Years Ended December 31, 2012 and 2011 2012 2011 Retained earings, January 1 $3,701,000 $3,264,000 Net income $ 600,000 $ 550,000 Dividends: On preferred stock (10,000) (10,000) On common stock (100,000) (100,000) Increase in retained earnings $ 490,000 $ 440,000 Retained earnings, December 31 $4,194,000 $3,704,000