Problem 1: Retained Earnings

The retained earnings account of Cloud Corporation follows:

Date Item Dr Cr
07/01/2021 Balance 48,500.00
03/31/2021 Dividends paid 20,000.00
12/31/2021 Net income for the year 32,400.00
04/01/2022 Premium on share capital 15,000.00
06/30/2022 Gain on sale of treasury shares 10,000.00
09/30/2022 Dividends declared 30,000.00
12/31/2022 Net income for the year 45,100.00
Appraisal increase of land 30,000.00
Balance 131,000.00
181,000.00 181,000.00

Required:
What is the corrected balance of retained earnings as at December 31, 2022?

Solution:

Balance 131,000.00
Add (Deduct) Adjustments:
Premium on share capital (15,000.00)
Gain on sale of treasury shares (10,000.00)
Appraisal increase of land (30,000.00) (55,000.00)
Retained Earnings - 12/31/22 76,000.00