Question

Messer Company had retained earnings at the beginning of the current year of $590,000. During the year, the following activities occurred. A.Net income of $88,000 was earned. B.A cash dividend of $1.20 per share was declared and distributed on the 50,000 shares of common stock outstanding.

Answer 1

Step-by-step explanation:

The preparation of the retained earnings statement for the year is presented below:

Messer Company

Retained Earning statement

For the year

Beginning balance of retained earning $590,000

Add: Net income $88,000

Less: Cash Dividend paid -$60,000 (50,000 shares × $1.20)

Ending balance of retained earning $618,000