Question 5 For the year ended December 31 2018 Sweetwater Fa

Question 5 For the year ended December 31, 2018, Sweetwater Farms Limited, a private company, reported net income of $160,600. The company declared dividends of $95,800 and paid $84,900 of these dividends during the year. Prepare a statement of retained earnings for the year, assuming the balance in Retained Earnings on January 1, 2018, was $487,000. (List items that increase retained earnings first.) SWEETWATER FARMS LIMITED Statement of Retained Earnings

Solution

SWEETWATER FARMS LIMITED Statement of Retained Earnings For the Year Ended December 31, 2018 Retained earnings, January 1 487000 Add: Net income 160600 647600 Less: Dividends 95800 Retained earnings, December 31 551800