Question

The following data are extracted from the stockholders' equity section of the balance sheet of Guthrie Corporation: 12/31/19 12/31/20 Common stock ($1 par value) ............... $50,000 $51,000 Paid-In capital in excess of par .......... 25,000 29,000 Retained earnings ......................... 50,000 52,300 During 2020, the corporation declared and paid cash dividends of $7,500 and also declared and issued a 2% stock dividend amounting to $5,000. Net income for 2020 was QUIZLET

Answer 1

Answer:

$14,800

Explanation:

We will get the Net Income by preparing Trial-account of Retained earnings.

                        Retained earnings

Cash dividend     $7,500       Beginning balance  $50,000

Stock dividend    $5,000       Net Income              $14,800 (Balance figure)

Ending balance   $52,300                                                    

Total                     $64,800                                       $64,800