Retained Earnings Statement Olivia Company began 2016 with a Retained Earnings account balance of $180,000. During 2016,

Question:

Retained Earnings Statement Olivia Company began 2016 with a Retained Earnings account balance of $180,000. During 2016, the following 8 events occurred and were properly recorded by the company:
1. Bonds payable with a of $100,000 were issued on January' 1 at 98. The bonds mature in 10 years. The bond provisions require the restriction of retained earnings (by means of a note to the equal to one half the of the bonds during the period the bonds arc outstanding.
2. On April 13, Olivia reissued 2,400 shares of treasury' stock for $25 per share. The company had reacquired these shares in 2014 at a cost of $20 per share. At that time, it had restricted retained earnings (by means of a note to the in an amount equal to the cost of the treasury' shares.
3. On January' 5, Olivia recalled and retired 800 shares of $100 par preferred stock at the call price of $120 per share. The stock had originally' been issued for $108 per share.
4. During June, Olivia declared and issued a 2-for-l stock split on its common stock, reducing the from $10 to $5 per share. Immediately prior to the split, 10,000 shares of were outstanding. The stock market price on the date of the split was $25 per share.
5. In August, Olivia declared and issued a 15% stock when the was selling at $13 per share.
6. During December, Olivia declared and paid its annual $1.30 per share cash on the outstanding common stock.
7. Net income amounted to $72,000.
8. During the year-end audit, it was found that in 2015, Olivia had recorded depredation on a particular machine twice. The error resulted in a $13,000 overstatement of depredation during 2015. It w as also found that, due to an oversight, a $10,000 loss on the sale of land was omitted from the 2015 income statement. Both items are material. The company has been subject to a 30% income tax rate for several years.
Required:
Prepare Olivia’s statement of retained earnings and any related notes to its for the year ended December 31, 2016. Financial Statements
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