Question

Sjostrom, Inc. had beginning retained earnings of \(300,000 on January 1, 2018. During the year, Sjostrom declared and paid \)140,000 of cash dividends and earned $200,000 of net income. Prepare a statement of retained earnings for Sjostrom, Inc. for the year ended December 31, 2018.

Short answer

The statement of retained earnings for the year ended December 31, 2018, shows the balance of $360,000

Step-by-step solution

Basic Introduction

Retained earnings is the surplus amount of profit remains with the corporation after distributing dividend to the stockholders of the corporation.

Statement of retained earnings

Statement of Retained Earnings December 31, 2018
Retained Earnings, beginning of the year	$300,000
Less: Dividend Paid	($140,000)
Add: Net Income	$200,000
Retained Earnings, ending of the year	$360,000