Question

Following is information for Goodyear Tire & Rubber Company for three recent years. Reconcile the retained earnings account for the three-year period.

(in millions)
Retained earnings 12/31/2010	$866
Net income, 2013	629
Net income, 2012	212
Net income, 2011	343
Dividends, 2013	41
Dividends, 2012	29
Dividends, 2011	22

Answer 1

Solution:

Goodyear Tire & Rubber Company Statement of retained earnings For the year ending December 31
(in millions)	2013	2012	2011
* Retained earnings beginning of year	$ 1,370	$ 1,187	$866
Add: Net income	629	212	343
Less: Dividends	(41)	(29)	(22)
Retained earnings, end of year	$ 1,958	$ 1,370	$ 1,187

* Retained earnings on 12/31/2010 are $ 866. This is ending retained earnings for year 2010, so this will be beginning inventory for 2011.

Notes:

-Ending inventory of 2011 will be beginning inventory for 2012.

- Ending inventory of 2012 will be beginning inventory for 2013.