Pinegrove Trail Club Inc. reports net income of 58,300 for the year and declared dividends of 20,000. Opening retained earnings was 140,000 and opening cash was 180,000. The cash flow statement shows a net change in cash of −$41,700. Complete the three year-end figures.

Answer

Retained earnings, end of year → 178300 · Cash, end of year → 138300 · Increase (decrease) in retained earnings → 38300

Cells - Retained earnings, end of year · ±0 - Cash, end of year · ±0 - Increase (decrease) in retained earnings · ±0 Retained earnings, end = 140,000 + 58,300 − 20,000 = **178,300** (the SRE chain). Cash, end = 180,000 − 41,700 = **138,300** (the cash flow statement chain; this must equal the balance-sheet cash). Increase in retained earnings = 178,300 − 140,000 = **38,300**, which is also net income less dividends declared, 58,300 − 20,000.

Dauderis & Annand §1.4 (statement linkage); Lyryx Intermediate FA Vol 1 §3.3; Hermanson Vol 1 ch 1, ch 16 (concept map B7, B8)