Question

Preparing a statement of retained earnings

Kingston, Inc. had beginning retained earnings of \(135,000 on January 1, 2018. During the year, Kingston declared and paid \)85,000 of cash dividends and earned $75,000 of net income. Prepare a statement of retained earnings for Kingston, Inc. for the year ending December 31, 2018.

Short answer

A statement of retained earnings for the year ending December 31, 2018 shows $125,000 ending retained earnings.

Step-by-step solution

Information given

Beginning retained earnings:$135,000

Dividend declared and paid:$85,000

Net Income:$75,000

Statement of retained earnings

Statement of Retained Earnings
Beginning retained earnings	$135,000
Less: Dividend paid	($85,000)
Add: Net Income	$75,000
Ending retained earnings	$125,000