USA Statement of Retained Earnings

[acctStudent10]

Hi!
I am an accounting student in my first week of classes and I have a question that is totally confusing me.

A company has retained earnings of $172,500 at December 31, 2010. Net Income for 2011 amounted to $56,400. Dividends for 2009 were $48,000. Prepare the statement of retained earnings for 2011.

I have no idea how to go about this. Any advice would be greatly appreciated. Thanks!

 

[kirby]

Let's solve the larger problem first
You cannot do this - why?
Did the teacher not explain the process?
Did the book not show an example?
Were you unable to attend class?

 

[Samir]

I don't know if this is the correct logic or answer, but here's my thoughts.

The company had a balance sheet balance on the Retained Earnings account in the amount of $172500 as of 12-31-2010.

The company made a net profit of $56400 as of 12-31-2011.

Of that net profit, nothing was paid out as a dividend in 2011.

So previous balance of 172500+56400 = 228900 as of 12-31-2011.

 

[ttreacy]

Retained Earnings Dec. 2010 = 172,500
Plus: Net Income for 2011 = 56,400
Less: Dividends for 2011 = 0
Retained Earnings for 2011 = 228,900