Question

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.

Answer 1

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

Step-by-step 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.