Pfizer Inc., a pharmaceutical company, reported net income for fiscal 2016 of $7,215 million, retained earnings at the start of the year of $71,993 million and dividends of $7,448 million, and other transactions with shareholders that increased retained earnings during the year by $14 million.
If there were no additional transactions during the year that affected retained earnings, what was the balance of retained earnings at the end of the year?
A) $ 71,774 million
B) $ 38,748 million
C) $ 124,926 million
D) $ 47,729 million
E) There is not enough information to calculate the amount.

Question

Quizplus · Accepted Answer

The ending retained earnings can be calculated as: Beginning retained earnings + Net income - Dividends + Other transactions = $71,993 million + $7,215 million - $7,448 million + $14 million = $71,774 million.