Calculate retained earnings for Construction Firm at 31 Dece

Calculate retained earnings for Construction Firm at 31 December 20X2 based on the following facts. Construction Firm accounts for treasury shares within additional paid-in capital / share surplus.

Retained earnings at 31 December 20X1: $126,000

Dividends paid in 20X2: $15,000

Dividends declared in 20X2: $20,000

Net loss for 20X2: ($78,000)

Treasury share repurchases in 20X2: $18,000

No other equity transactions in 20X2

Solution

Retained earnings at 31 December 20X1 126000 Less: Net loss for 20x2 (78000) Less: Dividends declared in 20X2 (20000) Retained earnings at 31 December 20X2 28000