Question

Retained Earnings Statement

Honey Mill Cameras Inc. reported the following results for the year ending October 31, 20Y9:

Retained earnings, November 1, 20Y8	$799,500
Net income	335,800
Cash dividends declared	102,000
Stock dividends declared	261,000

Prepare a retained earnings statement for the fiscal year ended October 31, 20Y9.

Honey Mill Cameras Inc.
Retained Earnings Statement
For the Year Ended October 31, 20Y9
		$
	$
		$

Answer 1

Answer

• The statement can be prepared in two ways:

#1

Honey Mill Cameras Inc.
Retained Earnings Statement
For the Year Ended October 31, 20Y9
Retained earnings, Nov 1, 20Y8		$799,500
Add: Net Income	$335,800
Less: Cash dividend	$102,000
Less: Stock dividend	$261,000	($27,200)
Retained earnings, Oct 31, 20Y9		$772,300

#2

Honey Mill Cameras Inc.
Retained Earnings Statement
For the Year Ended October 31, 20Y9
Retained earnings, Nov 1, 20Y8		$799,500
Add: Net Income	$335,800
Less: Dividend ($102000 + 261000)	$363,000
Increase (Decrease)		($27,200)
Retained earnings, Oct 31, 20Y9		$772,300