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Statement of Retained Earnings Landon Corporation was organized on January 2, 2015, with the investment of...

Statement of Retained Earnings

Landon Corporation was organized on January 2, 2015, with the investment of $100,000 by each of its two stockholders. Net income for its first year of business was $97,820. Net income increased during 2016 to $141,840 and to $165,950 during 2017. Landon paid $23,000 in dividends to each of the two stockholders in each of the three years.

Required:

Prepare a statement of retained earnings for the year ended December 31, 2017.

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Answer #1

Statement of retained earnings for the year ended December 31, 2017

$
Beginning retained earnings 147660
(+) Net income for the year 165950
(-) Dividend paid (23000*2) 46000
Ending retained earnings 267610
Working note :

Year

2015

2016
Beginning retained earnings    0 51820
(+) Net income for the year 97820    141840
(-) Dividend paid (23000*2)    46000 46000
Ending retained earnings 51820 147660

Ending retained earnings of one year becomes the beginning retained earnings of the next year.

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