The retained earnings balance was $22,900 on January 1.Net income for the year was $18,100.If retained earnings had a credit balance of $23,800 after closing entries were made for the year,and if additional stock of $5,200 was issued during the year,what was the amount of dividends declared during the year?
A)$17,200
B)$23,700
C)$23,300
D)$13,000

Question

Quizplus · Accepted Answer

The formula for retained earnings is: Beginning Retained Earnings + Net Income - Dividends = Ending Retained Earnings. Plugging in the values: $22,900 + $18,100 - Dividends = $23,800. Solving for Dividends gives $17,200. The issuance of stock does not affect retained earnings.

The Retained Earnings Balance Was $22,900 on January 1