Exercise 1516 The following information has been taken from

Exercise 15-16

The following information has been taken from the ledger accounts of Pina Corporation.

Determine the current balance of retained earnings.

Total income since incorporation		$348,000
Total cash dividends paid		57,000
Total value of stock dividends distributed		28,000
Gains on treasury stock transactions		16,000
Unamortized discount on bonds payable		29,000

Solution

Current Balance of Retained Earnings Total Income since incorporation $ 348,000.00 Less: Total Cash dividend paid $    57,000.00 Less: Total Value of stock dividend distributed $    28,000.00 Current Balance of Retained Earnings $ 263,000.00 Note: Both Stock dividend and cash dividend deducted from retained earnings. Gain on sale of treasury stock should be credited to paid in capital of treasury stock. Unamortized bonds discount reported as contra liability in the balance sheet.