I *know* the answer to this problem, I just don't know how they "prepared" it.
Retained earnings.. so simple, yet I'm totally stumped on this. I know you just get the retained earnings of the previous year, add in the net income, less dividends and there you go... the new retained earnings.
But it's with T-charts?
This is what it looks like:
Prepare a retained earnings statement
Retained Earnings
-------------------------------------
Aug. 31 $16,000 | Sept. 1 (2007) $573,750
Aug. 31 $95,000
Dividends
--------------------------------
Nov. 30 $4,000 | Aug. 31 $16,000
Feb. 28 $4,000
May. 31 $4,000
Aug. 31 $4,000
Income Summary
---------------------------------
Aug. 31 $380,000 | Aug. 31 $475,000
31 $95,000
EDIT
Yeah, but how would that look prepared as a retained earnings statement? That's what I want to know.
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