The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available: What is the ending balance for retained earnings?
A)$264,000.
B)$13,000.
C)$243,000.
D)$197,000.
E)$105,000.

Question

The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended.The following information is available:  What is the ending balance for retained earnings?
A)$264,000. 
B)$13,000. 
C)$243,000. 
D)$197,000. 
E)$105,000.

Quizplus · Accepted Answer

The ending balance for retained earnings can be found by looking at the statement of retained earnings or by subtracting dividends declared from net income. The statement of retained earnings is not provided in the information given, but it is mentioned that dividends declared during the year were $66,000. Therefore, the calculation would be: Beginning Retained Earnings + Net Income - Dividends = Ending Retained Earnings.

$328,000 + $135,000 - $66,000 = $397,000 - $130,000 (prior year retained earnings adjustment) = $267,000.

Therefore, the correct answer is D) $197,000.

The Accountant for Huckleberry Company Is Preparing the Company's Statement