Reese Company reported retained earnings at December 31, 2013, of $310,000. Reese had 160,000 ordinary shares outstanding throughout 2014.
The following transactions occurred during 2014.
1. An error was discovered in 2012, depreciation expense was recorded at $70,000, but the correct amount was $50,000.
2. A cash dividend of $0.50 per share was declared and paid.
3. A 10% share dividend was declared and distributed when the market price per share was $15 per share.
4. Net income was $225,000.
Instructions
Prepare a retained earnings statement for 2014.

Question

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The Answer of Reese Company reported retained earnings at December 31, 2013, of $310,000. Reese had 160,000 ordinary shares outstanding throughout 2014.
The following transactions occurred during 2014.
1. An error was discovered in 2012, depreciation expense was recorded at $70,000, but the correct amount was $50,000.
2. A cash dividend of $0.50 per share was declared and paid.
3. A 10% share dividend was declared and distributed when the market price per share was $15 per share.
4. Net income was $225,000.
Instructions
Prepare a retained earnings statement for 2014.

Reese Company Reported Retained Earnings at December 31, 2013, of $310,000