Valix Finacc vol 1 Problem 18-8

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 18 Problem 18-8

1. Retained earnings                                                                                                1,500,000

    Accumulated depletion                                                                                       2,500,000

    Total                                                                                                                     4,000,000

    Less: Capital liquidated                                                               1,800,000

    Depletion in ending inventory (5,000 x 20)                                      100,000         1,900,000

    Maximum dividend                                                                                             2,100,000

                                                                                                                                   

2. Retained earnings                                                                           1,800,000         

    Capital liquidated                                                                             200,000

            Dividends payable                                                                                          2,000,000