Corporations: Dividends, Retained Earnings, and income Reporting

On January 1, 2020, Eddy Corporation had retained earnings of $650,000. During the year, Eddy had the following selected transactions.

1. Declared cash dividends $120,000.
2. Corrected overstatement of 2019 net income because of inventory error $40,000.
3. Earned net income $350,000.
4. Declared stock dividends $90,000.

Instructions

Prepare a retained earnings statement for the year.

Solution