Question

PLEASE USE THE CHART PROVIDED Sumter Pumps Corporation, a manufacturer of industrial pumps, reports the following...

PLEASE USE THE CHART PROVIDED

Sumter Pumps Corporation, a manufacturer of industrial pumps, reports the following results for the year ended December 31, 20Y3:

Retained earnings, January 1, 20Y3 $60,583,000
Net income 7,466,000
Cash dividends declared 1,001,000
Stock dividends declared 2,607,000

Prepare a retained earnings statement for the year ended December 31, 20Y3. Be sure to complete the statement heading. Refer to the lists of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted negative numbers use a minus sign.

Labels
For the Year Ended December 31, 20Y3
December 31, 20Y3
Amount Descriptions
Change in retained earnings
Dividends
Excess of issue price over par
Issuance of additional common stock
Issuance of additional preferred stock
Net income
Net loss
Retained earnings, December 31, 20Y3
Retained earnings, January 1, 20Y3

Prepare a retained earnings statement for the year ended December 31, 20Y3. Be sure to complete the statement heading. Refer to the lists of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted negative numbers use a minus sign.

Sumter Pumps Corporation

Retained Earnings Statement

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Business   Accounting   
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Answer #1

Retained Earnings is the amount left in the business in the form of net income after paying out of Dividends to shareholders. Therefore, from the beginning balance of retained earnings, the net income earned during the year is added and any dividends-both cash dividends and stock dividends, declared or paid is reduced. The balance will be the ending balance of retained earnings.

Workings:

Dividends = Cash dividends + Stock dividends
= $1,001,000 + $2,607,000 = $3,608,000

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