Chapter 22, Problem 9E

To determine

Retained earnings: Retained earnings mean the part of profits earned by the company instead of giving it as a dividend, the amount is retained by the company.

To prepare: To prepare statement of retained earnings after revision for the year 2017 and 2018.

Given information:

Particulars	2018	2017
Sales	340,000	270,000
Cost of sales	200,000	142,000
Gross profit	140,000	128,000
Expenses	88,000	50,000
Net income	52,000	78,000
Retained earnings (Jan 1)	1,25,000	72,000
Net income	52,000	78,000
Dividend	(30,000)	(25,000)
Retained earnings (Dec 31)	147,000	125,000

Original cost of the asset is $100,000.

Estimated useful life is 4 years.

No salvage value.