Question

Biglo Chemical Company reported the following in the statement of comprehensive income for the year ended December 31: Income from continuing operations before tax Income tax expense Net income Other comprehensive income Comprehensive income $600,000 (140,000) 460,000 110,000 240,000 During the year, the company paid $60,000 in dividends and purchased treasury stock with a par value of $10,000 at a cost of $70,000. If the balance of Retained Earnings at the beginning of the year was $380,000, what is the balance of Retained Earnings at the end of the year?

Answer 1

Please find the answer for the first sum

Retained earnings at the beginning	380000
Net income	460,000
Dividend paid	(60,000)
Retained earnings at the end of the year	780,000	This is the closing retained earnings balance as required
Treasury stock purchased at cost	(70,000)	Treasury stock are to be deducted from total equity as this stock are companies own stock purchased from stock market.
Accumulated comprehensive income	240,000	As given this is assumed that this is accumulated balance
Total of of stock holders equity excluding equity	950,000	Equity Capital is not given hence this will be total equity excluding the equity share capital

second question

Rate of interest is 2.11 %. The following answer is calculated in excel with the help of goal seek formula.

Date	Amount	Interest
31-Mar-16	1,576.98	8.329326
30-Jun-16	3,162.29	16.70265
30-Sep-16	4,755.97	25.12019
31-Dec-16	6,358.07	33.5822
31-Mar-17	7,968.63	42.0889
30-Jun-17	9,587.70	50.64053
30-Sep-17	11,215.32	59.23734
31-Dec-17	12,851.54	67.87954
31-Mar-18	14,496.40	76.5674
30-Jun-18	16,149.95	85.30114
30-Sep-18	17,812.23	94.08101
31-Dec-18	19,483.29	102.9073
31-Dec-19	19,586.20	413.8032	20,000.00

Let me know if anything is to be explained in this.