Messer Company had retained earnings at the beginning of the current year of $590,000. During the year, the following activities occurred. A. Net income of $88,000 was earned. B. A cash dividend of $1.20 per share was declared and distributed on the 50,000 shares of common stock outstanding.

Explanation:

The preparation of the retained earnings statement for the year is presented below:

                                           Messer Company

                              Retained Earning statement

                                              For the year

Beginning balance of retained earning $590,000

Add: Net income $88,000

Less: Cash Dividend paid -$60,000    (50,000 shares × $1.20)

Ending balance of retained earning $618,000

d. low interest rates