On January 1, 2020, Eddy Corporation had retained earnings of $650,000

On January 1, 2020, Eddy Corporation had retained earnings of $650,000. During the year, Eddy had the following selected transactions.

Declared cash dividends $120,000.
Corrected overstatement of 2019 net income because of inventory error $40,000.
Earned net income $350,000.
Declared stock dividends $90,000.

Instructions

Prepare a retained earnings statement for the year.

Solution

Eddy Corporation
Retained Earnings Statement
For the Year Ended December 31, 2020

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Instructions

Solution

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