Question

Sumter Pumps Corporation, a manufacturer of industrial pumps, reports the following results for the year ended December 31, 20Y3: Retained earnings, January 1, 20Y3 $59,650,000 Net income 8,160,000 Cash dividends declared 1,000,000 Stock dividends declared 2,600,000 Prepare a retained earnings statement for the year ended December 31, 20Y3. Sumter Pumps Corporation Retained Earnings Statement For the Year Ended December 31, 20Y3 $ $ $

Answer 1

Answer: $66,810,000

Explanation: take the balance at the beginning of the year add it to the net income from statement of comprehensive incomes then minus the cash dividends declared from the total of the beginning balance and net income then get the retained balance at the end of the 20Y3 year  of 66 810 000.

The stock dividends of 2,600,000 have two accounts involved which is stock( inventory) and dividends declared which is an liability.

  Sumter Pumps Corporation        

         

   retained income statement for the year ending 31 december 20Y3      

         

balance 01/jan/20Y3      $59,650,000      

         

CHANGES IN EQUITY          

Net Income      8,160,000    

dividends paid and declared          

Cash dividend      1,000,000    

stock dividend      0    

         

balance 31 dec 20Y3      $66,810,000