On January 1, 2014, Chu Corporation had retained earnings of $422,000. During the year, Chu had the following selected transactions:
1. Declared cash dividends of $100,000.
2. Suffered a loss of $70,000.
3. Corrected understatement of 2013 profit because of an inventory error $45,000. The company has a 30% income tax rate.
Instructions
Prepare a statement of retained earnings for the year.

Question

Quizplus · Accepted Answer

The Answer of On January 1, 2014, Chu Corporation had retained earnings of $422,000. During the year, Chu had the following selected transactions:
1. Declared cash dividends of $100,000.
2. Suffered a loss of $70,000.
3. Corrected understatement of 2013 profit because of an inventory error $45,000. The company has a 30% income tax rate.
Instructions
Prepare a statement of retained earnings for the year.

On January 1, 2014, Chu Corporation Had Retained Earnings of $422,000