Question

A. On January 1, Katie Inc.had Retained Earnings of $650,000. During the year, Katie Inc. had the following selected transactions: declared cash dividends of $100,000; corrected overstatement of prior year net income because of depreciation error of $50,000; earned net income of $400,000; and declared stock dividends of $50,000. The ending balance for Retained Earnings is............

B. Katie Inc. reported net income of $171,000 for the current year and paid dividends of $26,000 on common stock. It also has 10,000 shares of 6%, $100 par value, noncumulative preferred stock outstanding. Common stockholders’ equity was $1,200,000 on January 1 and $1,600,000 on December 31. The company’s return on common stockholders’ equity for the current year is........

C. Katie Inc. & Topaz Sisters had Retained Earnings of $10,000 on the balance sheet but disclosed in the footnotes that $2,000 of Retained Earnings was restricted for plant expansion and $1,000 was restricted for bond repayments. Cash of $2,000 had been set aside for the plant expansion. How much of Retained Earnings is available for Dividends?..............

Please show your work & explain. Thanks.

Answer 1

These are 3 seperate questions and surely not 3 subquestions as the matter is being changed in each question. As per the company policy , I am answering only one.

Hope this answer helps. In case of any further queries regarding this answer , please comment below. I will be more than pleased to answer all your queries.