Statement of Retained Earnings

For the Year Ended December $31,2025$

January

$1,2025$

Balance $($deficit$)$

$$(544,500)$

March

$31,2025$

Net income for first quarter of $2025$

$30,250$

April

$1,2025$

Transfer from paid$-$in capital

$514,250$

Balance

December $31,2025$

Net income for last three quarters of $2025$

$108,900$

Dividend declared$-$payable January $21,2026$

$(84,700)$

Balance

$$24,200$

Your working papers from the audit contain the following information:

$1.$

$2.$

On April $1,2025,$ the existing deficit was written off against paid$-$in capital created by reducing the stated value of the no$-$par stock.

On November $1,2025,35,816$ shares of no$-$par stock were sold for $$310,970.$ The board of directors voted to regard $$5$ per share as stated capital.

$3.$

A patent was purchased for $$18,150.$

$4.$

$5.$

$6.$

$7.$

During the year, machinery that had a cost basis of $$19,844$ and on which there was accumulated depreciation of $$6,292$ was sold for $$10,890.$ No other plant assets were sold during the year.

The $12\%,20-$year bonds were dated and issued on January $2,2013.$ Interest was payable on June $30$ and December $31.$ They were sold originally at $106.$ These bonds were redeemed at $100\mathrm{.}9$ plus accrued interest on March $31,2025.$

The $8\%,40-$year bonds were dated January $1,2025,$ and were sold on March $31$ at $97$ plus accrued interest. Interest is payable semiannually on June $30$ and December $31.$ Expense of issuance was $$1,015.$

Oriole Corporation acquired $70\%$ control in Crimson Company on January $2,2025,$ for $$121,000.$ The income statement of Crimson Company for $2025$ shows a net income of $$18,150.$

$8.$

Major repairs to buildings of $$8,712$ were charged to Accumulated Depreciation$-$Buildings.