On December 31, 2014, before closing the accounts, Rampart Corporation had a balance in Retained Earnings of $30,000. Rampart's net income for the year was $12,000. On that date, the board of directors approved an appropriation of retained earnings in the amount of $10,000 because the company planned to expand its facilities. The corporation had 1,000 shares of $10 par common stock outstanding and a balance in Paid in Capital in Excess of Par Value of $18,000.
Required:
a) Indicate the effect of the appropriation of retained earnings on the financial statements.

Question

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The Answer of On December 31, 2014, before closing the accounts, Rampart Corporation had a balance in Retained Earnings of $30,000. Rampart's net income for the year was $12,000. On that date, the board of directors approved an appropriation of retained earnings in the amount of $10,000 because the company planned to expand its facilities. The corporation had 1,000 shares of $10 par common stock outstanding and a balance in Paid in Capital in Excess of Par Value of $18,000.
Required:
a) Indicate the effect of the appropriation of retained earnings on the financial statements.

On December 31, 2014, Before Closing the Accounts, Rampart Corporation