Powder Corporation Began Operations on January 2, 2015, with a Total

question 61

Essay

Powder Corporation began operations on January 2, 2015, with a total investment of $150,000 by its stockholders.Net income for its first year of business was $90,000.During 2016 and 2017, net income increased to $188,000 and to $217,000, respectively.Powder paid $85,000 in dividends to its shareholders in each of the three years.
A)In good form, prepare a statement of retained earnings for the year ended December 31, 2016.
B)How much is total retained earnings on December 31, 2017?
C)Explain the link between the statement of retained earnings and the balance sheet.

• A)In good form, prepare a statement of retained earnings for the year ended December 31, 2016.
• B)How much is total retained earnings on December 31, 2017?
• C)Explain the link between the statement of retained earnings and the balance sheet.

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Definitions:

Innovative Behaviours

Actions or tendencies of individuals or organizations geared towards the discovery, creation, and implementation of new ideas, products, or processes.

Compensation Strategies

The planning and implementation methods used by businesses to reward employees financially for their work and performance.

Contingency View

A management perspective emphasizing that organizational strategies and structures should vary according to the situation or environment.

Structural Variables

Factors within an organization that shape its behavior and performance, such as its size, technology, and organizational structure.