The Income Statement for Hudson Company Reported Net Income of $345,000

question 93

Essay

The income statement for Hudson Company reported net income of $345,000 for the year ended December 31 before considering the following:
$\bullet$ During the year the company purchased trading securities.
$\bullet$ At year end, the fair value of the investment portfolio was $23,000 less than cost.
$\bullet$ The balance of Retained Earnings was $823,000 on January 1.
$\bullet$ Hudson Company paid $43,000 in cash dividends during the year.
Calculate the balance of Retained Earnings on December 31.

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Definitions:

Investors

Individuals or entities that allocate capital with the expectation of receiving financial returns.

Lock-Up Provisions

Lock-Up Provisions refer to contractual clauses that prevent insiders of a company from selling their shares for a certain period post an initial public offering (IPO).

Redemption

The process of returning an investment's principal amount to its holder upon its maturity or a specified date.

Directional Strategy

Speculation that one sector or another will outperform other sectors of the market.