. Jordan’s Jeans Company reported net income for 2014 of $871,800 and the company paid dividends of $0.08
per share in 2014. Given this information (along with the data provided above), compute what Jordan’s Jeans
Company reported as retained earnings on its December 31, 2013 balance sheet? (Assume that no additional
shares of stock were issued between December 31, 2013 and December 31, 2014).
To determine Jordan's Jeans Company's retained earnings on its December 31, 2013 balance sheet, we need to consider the following information:
1. Net income for 2014: $871,800
2. Dividends per share paid in 2014: $0.08
Retained earnings can be calculated using the following formula:
Retained Earnings = Beginning Retained Earnings + Net Income - Dividends
Since the beginning retained earnings on December 31, 2013, is not given directly, we can assume that it is the retained earnings from the previous year, which can be considered as zero unless mentioned.
Therefore, the calculation would be as follows:
Retained Earnings = 0 + $871,800 - ($0.08 x Number of Shares)
We need to know the number of shares outstanding to compute the dividends paid. Please provide the number of shares, and I can provide the exact value for retained earnings.
To compute Jordan's Jeans Company's retained earnings on its December 31, 2013 balance sheet, we need to consider the following:
1. Net income for 2014: $871,800
2. Dividends paid per share in 2014: $0.08
Retained earnings represent the accumulated profits that have not been distributed as dividends. It can be calculated using the formula:
Retained Earnings = Beginning Retained Earnings + Net Income - Dividends
Since we are given the net income for 2014 and the dividends paid, we need to find the beginning retained earnings.
Let's assume that there were no additional shares issued between December 31, 2013, and December 31, 2014. This means that the number of shares outstanding remained the same.
To find the beginning retained earnings, we need to determine the retained earnings at the end of 2013, which would be the retained earnings at the beginning of 2014. We can use the formula:
Retained Earnings at Beginning of 2014 = Retained Earnings at Beginning of 2013 + Net Income for 2013 - Dividends for 2013
However, the problem does not provide the net income and dividends for 2013. Without this information, it is not possible to compute the retained earnings at the beginning of 2014.
To find the retained earnings on Jordan's Jeans Company's December 31, 2013 balance sheet, you would need to obtain the net income and dividends for the year 2013. With this information, you can use the formula mentioned above to calculate the retained earnings at the beginning of 2014.