Newland Company reported retained earnings at December 31, 2019, of $310,000. Newland had 200,000 shares of common stock outstanding at the beginning of 2020. The following transactions occurred during 2020.

1. An error was discovered, In 2018, depreciation expense was recorded at $70,000, but the correct amount was $50,000.
2. A cash dividend of $0.50 per share was declared and paid.
3. A 5% stock dividend was declared and distributed when he market price per share was $15 per share
4. Net income was $285,000.

Instructions

Prepare a retained earnings statement for the year.

Solution