Question

Culver Corporation has retained earnings of $718,500 at January 1, 2017. Net income during 2017 was $1,596,000, and cash dividends declared and paid during 2017 totaled $80,500. Prepare a retained earnings statement for the year ended December 31, 2017. Assume an error was discovered: land costing $86,470 (net of tax) was charged to maintenance and repairs expense in 2014. (List items that increase retained earnings first.)

Answer 1

Explanation:

The preparation of the retained earnings statement for the year ended December is presented below:

                                         Culver Corporation

                             Retained Earning statement

                        For the year ended December 31, 2017

Beginning balance of retained earning $718,500

Add: Correction recorded $86,470

Add: Net income $1,596,000

Less: Cash Dividend paid -$80,500

Ending balance of retained earning                        $2,320,470