The following information relates to the Smith Company: $\begin{array}{ll}
2010 \text { cash dividend declared } & \$ 400 \
\text { Restated (adjusted) retained earnings, January 1, 2010 } & ? \
2010 \text { net income } & 480 \
\text { Error in 2009-Underst at ement of ending inventory, } \
\text { error found in 2010 } & 150\
\text { Restated (adiusted) retained earnings, December 31, } 2010& 1,550
\end{array}$ What is the adjusted January 1, 2010, balance in retained earnings?
A)$1, 170
B)$1, 320
C)$1, 470
D)$1, 630

Question

The following information relates to the Smith Company: $\begin{array}{ll}
2010 \text { cash dividend declared } & \$ 400 \
\text { Restated (adjusted) retained earnings, January 1, 2010 } & ? \
2010 \text { net income } & 480 \
\text { Error in 2009-Underst at ement of ending inventory, } \
\text { error found in 2010 }  & 150\
\text { Restated (adiusted) retained earnings, December 31, } 2010& 1,550
\end{array}$  What is the adjusted January 1, 2010, balance in retained earnings?
A)$1, 170
B)$1, 320
C)$1, 470
D)$1, 630

Quizplus · Accepted Answer

To find the adjusted January 1, 2010 balance in retained earnings, we need to start with the beginning balance in retained earnings (which is given as $1,000), add the net income for the year (which is given as $500), and subtract any dividends paid (which are not given). We can see from the statement that total dividends for the year were $30. Therefore, the adjusted January 1, 2010 balance in retained earnings is:

$1,000 beginning balance
+ $500 net income
- $30 dividends
= $1,470

Therefore, the answer is C.

The Following Information Relates to the Smith Company What Is the Adjusted January 1, 2010, Balance in Retained