PROBLEM 2 6 points Hertz Corporation reported retained earni

PROBLEM 2 (6 points) Hertz Corporation reported retained earnings at December 31, 2016, of $320,000. It had 200,000 shares of common stock outstanding throughout 2017. The following transactions occurred during 2017 + 1) 2) -3) Net income was $350,000. A cash dividend of $0.5? per share was declared and paid. A 7% stock dividend was declared an $16 per shares. A cash dividend of $0.60 per share was declared and paid. d distributed to common stockholders when the market price per share wa 4) nstructions: Prepare a retained earnings statement for 2017.

Solution

Statement of Retained Earnings Dec 31 2018 Beginning Retained Earnings $320,000.00 + Net income $350,000.00 Less: Cash Dividend (200,000 shares x $.50 Per share) $100,000.00 (200,000 shares x $.60 Per share) $120,000.00 -$220,000.00 Less: Stock Dividend = 7% x 200,000 x $16 per share -$224,000.00 Retained Earnings at the End $226,000.00