Using the income statement for Sentinel Travel Service shown in Practice Exercise 1-4B, prepare a retained earnings statement for the year ended August 31, 2016. Barb Schroeder invested an additional $36,000 in the business in exchange for common stock, and $18,000 of dividends were paid during the year. Retained earnings as of September 1, 2015, were $300,000.
Answer:
SENTINEL TRAVEL SERVICE
Retained Earnings Statement
For the Year Ended August 31, 2016
Retained earnings, September 1, 2015 $250,000
Net loss for the year $ 7,000
Plus dividends 18,000
Decrease in retained earnings 25,000
Retained earnings, August 31, 2016 $275,000
RE Sep. 1, 2015 should be $ 300,000; not $250,000 :-)
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