Question

Caterpillar Inc.’s statement of stockholders’ equity for 2016 and 2015 shows the following amounts. Fill in...

Caterpillar Inc.’s statement of stockholders’ equity for 2016 and 2015 shows the following amounts. Fill in the missing items to show how retained earnings articulate across the years. (6 points)

($ millions)

2016

2015

Retained earnings, beginning of year

A ?

$28,515

Net income (loss) for the year

(67)

C ?

Dividends

B ?

(1,781)

Retained earnings, end of year

$27,377

$29,246

__________

__________

__________

Business   Accounting   
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Homework Answers

Answer #1

A. Retained earnings, beginning of year for 2016 = Retained earnings, end of year for 2015

= $ 29,246

Hence the correct answer is $ 29,246

B .Retained earnings, end of year = Retained earnings, beginning of year + Net Income (Loss) for the Year - Dividends

$ 27,377 = $ 29,246 - 67 - Dividends

Dividends = $ 29,246 - 67 - $ 27,377

= $ 1,802

Since Dividend is an outflow it is to be expressed as a negative amount.

Hence the correct answer is ($ 1,802)

C. Retained earnings, end of year = Retained earnings, beginning of year + Net Income (Loss) for the Year - Dividends

Retained earnings, end of year - Retained earnings, beginning of year + Dividends = Net Income (Loss) for the Year

$ 29,246 - $ 28,515 + 1,781 = Net Income (Loss) for the Year

Net Income (Loss) for the Year = 2,512

Hence the correct answer is 2,512

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