Newland Company reported retained earnings at December 31, 2013, of $309,930. Ne

ID: 2421390 • Letter: N

Question

Newland Company reported retained earnings at December 31, 2013, of $309,930. Newland had 197,200 shares of common stock outstanding at the beginning of 2014. The following transactions occurred during 2014. An error was discovered. In 2012, depreciation expense was recorded at S66,190, but the correct amount was S46,560. A cash dividend of $0.46 per share was declared and paid. A 6% stock dividend was declared and distributed when the market price per share was $16 per share. Net income was $286,700. Prepare a retained earnings statement for 2014. (List items that increase retained earnings first)

Explanation / Answer

NEW LAND COMPANY

Retained earnings statements

For the year ended 31, 2014

Retained earnings at beginning

$ 309930

Net income

$286700

Add- depreciation expense wrongly recoded

$ 66190

Less- correct depreciation expense

$ 46560

Retained earnings during the year

$616,260

Cash dividend

$ 90712

Stock dividend

$ 189312

$ 280024

Retained earnings at end

$336,236