One of the four key financial statements is the statement of Retained Earnings (R.E). To prepare this statement it is important to know its overall structure and to be able to prepare journal entries for net income and dividends. We measure LO1.2 using below homework.

Company ABC Year 2020 R.E. (Jan. 1, 2020) = $20,000 Cash dividends declared = 400 Cash dividends paid = 360 Net income = 7,000

1) Do the journal entry for the net income 2) Do the journal entry for the dividends declared 3) Do the journal entry for the dividends paid 4) Present the R.E. statement