Marenelle Construction has beginning retained earnings of $284,300.For the year, the company earned net income of $13,700 and paid dividends of $9,000.The company also issued $25,000 worth of new stock.What is the value of the retained earnings account at the end of the year?

Question

Quizplus · Accepted Answer

The ending retained earnings are calculated as beginning retained earnings plus net income minus dividends. Thus, $284,300 + $13,700 - $9,000 = $289,000. The issuance of new stock does not affect retained earnings.

Marenelle Construction Has Beginning Retained Earnings of $284,300