Henson Company began the year with retained earnings of $380,000.During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000.What was Henson's retained earnings balance at the end of the year?
A)$540,000
B)$460,000
C)$840,000
D)$500,000

Question

Quizplus · Accepted Answer

Retained earnings = Beginning retained earnings + Net income - DividendsNet income = Revenues - ExpensesNet income = $500,000 - $380,000 = $120,000Retained earnings = $380,000 + $120,000 - $40,000 = $460,000

Henson Company Began the Year with Retained Earnings of $380,000