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17 December, 13:39

Johnlee , Inc. had beginning retained earnings of $ 140,000 on January 1, 2018. During the year, Johnlee declared and paid $ 55,000 of cash dividends and earned $ 95,000 of net income. Prepare a statement of retained earnings for Johnlee , Inc. for the year ending December 31, 2018.

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  1. 17 December, 13:41
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    Statement of retained earning

    as on December 31,2018

    Retained Earning January 1 $140,000

    Add: Net Income for 2018 $95,000

    Less: Dividend $55,000

    Retained Earning December 31 $180,000

    Explanation:

    Retained Earning is an equity account and its balance is credit in nature. It is the accumulated balance of all the prior year's income / losses after paying all the dividend. This balance can be used for the dividend payment or reinvestment in the business.
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