Rex Company reported retained earnings at December 31, 2017, of $420,000. Reese had 180,000 shares of common stock outstanding throughout 2018.
The following transactions occurred during 2018.
1. Net income was $295,000.
2. A cash dividend of $0.50 per share was declared and paid.
3. A 5% stock dividend was declared and distributed when the market price per share was $15 per share.
Instructions
Prepare a retained earnings statement for 2018.

Question

Quizplus · Accepted Answer

The Answer of Rex Company reported retained earnings at December 31, 2017, of $420,000. Reese had 180,000 shares of common stock outstanding throughout 2018.
The following transactions occurred during 2018.
1. Net income was $295,000.
2. A cash dividend of $0.50 per share was declared and paid.
3. A 5% stock dividend was declared and distributed when the market price per share was $15 per share.
Instructions
Prepare a retained earnings statement for 2018.

Rex Company Reported Retained Earnings at December 31, 2017, of $420,000