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Wyler​, Inc. had beginning retained earnings of $ 115 comma 000 on January ​1, 2018. During the​ year, Wyler declared and paid $ 70 comma 000 of cash dividends and earned $ 100 comma 000 of net income. Prepare a statement of retained earnings for Wyler​, Inc. for the year ending December ​31, 2018.

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Answer:

                                                                        $

Net income                                               100,000                                                                                                

Less: Dividend paid                                  70,000

Retained earnings for the year               30,000

Statement  of Retained earnings for the year ended December 31, 2018

                                                                         $

Retained earnings on January 1, 2018       115,000

Add: Retained earnings  for the year         30,000

Retained earnings  at December 31,2018  145,000

Explanation:

In this case, we need to calculate the retained earnings for the year, which is net income minus dividend paid. Then, we will add the retained earnings for the year to retained earnings at the beginning of the year. This gives the retained earnings at the end of the year.

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