Question

Sheffield Corporation has retained earnings of $698,400 at January 1, 2020. Net income during 2020 was $1,666,300, and cash dividends declared and paid during 2020 totaled $81,300. Prepare a retained earnings statement for the year ended December 31, 2020. Assume an error was discovered: land costing $87,890 (net of tax) was charged to maintenance and repairs expense in 2019. (List items that increase retained earnings first.)

Create an Retained Earnings Statement.

Answer 1

1)

Statement of Retained Earnings

Statement of Retained Earnings
For the year ended Dec 31, 2020
Retained earnings January 1, 2020	$        6,98,400
Prior period error adjustment of Land	$           87,890
Adjusted retained earnings January 1, 2020	$        7,86,290
Add: Net Income For The Year	$      16,66,300
Less: Cash Dividend Paid	$           81,300
Retained earnings Dec 31, 2017	$      23,71,290

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