Question

The following information has been taken from the ledger accounts of Bridgeport Corporation.

Total income since incorporation $292,000
Total cash dividends paid 55,000
Total value of stock dividends distributed 31,000
Gains on treasury stock transactions 16,000
Unamortized discount on bonds payable 29,000
Determine the current balance of retained earnings.

Answer 1

Answer:current balance of retained earnings=$206,000

Step-by-step explanation:

Net Retained Earnings = Total Income since Incorporation−

Total Cash Dividend Paid− Value of Stock Dividend distributed

Where

cash dividends distributed among the stakeholders= $55,000

value of stock dividends distributed = $31,000

Total Dividend Distributed = $86,000

Net Retained Earnings = $292,000 -($86,000)=$206,000