etained Earnings Statement

Rolt Company began 2013 with a $140,000 balance in retained earnings. During the year, the following events occurred:

1) The company earned net income of $85,000.

2) A material error in net income from a previous period was corrected. This error correction increased retained earnings by $7,000 after related income taxes of $3,000.

3) Cash dividends totaling $13,000 and stock dividends totaling $16,500 were declared.

4) One thousand shares of callable preferred stock that originally had been issued at $110 per share were recalled and retired at the beginning of 2013 for the call price of $115 per share.

5) Treasury stock (common) was acquired at a cost of $17,000. State law requires a restriction of retained earnings in an equal amount. The company reports its retained earnings restrictions in a note to the financial statements.

Prepare a statement of retained earnings for the year ended December 31, 2013.