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At the beginning of 2021, Sheffield Corp. had retained earnings of $403000. During the year Sheffield...

At the beginning of 2021, Sheffield Corp. had retained earnings of $403000. During the year Sheffield reported net income of $110000, sold treasury stock at a “gain” of $35000, declared a cash dividend of $60900, and declared and issued a small stock dividend of 3100 shares ($10 par value) when the fair value of the stock was $18 per share. The amount of retained earnings available for dividends at the end of 2021 was

$431300.

$396300.

$421100.

$456100.

Business   Accounting   
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Answer #1

The correct answer is "$431,300".

Calculations:

Particulars Amount ($)
Beginning Balance of Retained Earnings        4,03,000
Add: Net Income        1,10,000
Add: Gain on treasury stock           35,000
Less: Cash dividend declared         -60,900
Less: Small stock dividend         -55,800 (3100 shares * $18)
Retained earnings at end of 2021       4,31,300
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