Question

Another topic this week is comprehensive income. Again, please review this week's lesson and attempt this exercise:

For the year ended December 31, 201X, Howdy Inc. reported the following. What would Howdy report as the ending balance of retained earnings? Show how the Stockholders' Equity section of the balance sheet should look like.
Net income	$30,000
Preferred dividends declared	$5,000
Common dividend declared	$1,000
Unrealized holding loss, net of tax	$500
Retained earnings, beginning balance	$40,000
Common stock	$20,000
Accumulated other comprehensive income, beginning balance	$3,000

Answer 1

Retained earnings statement

Retained earnings, beginning	40,000
Net income	30,000
Preferred dividends declared	- 5,000
Common dividend declared	- 1,000
Retained earnings, ending	64,000

Accumulated other comprehensive income, ending balance  = Accumulated other comprehensive income, beginning balance - Unrealized holding loss, net of tax

= 3,000 - 500

= $2,500

Balance sheet (partial)

Stockholders' equity
Common stock	20,000
Retained earnings	64,000
Accumulated other comprehensive income	2,500
Total stockholders' equity	86,500

Kindly comment if you need further assistance. Thanks