During the year, Roger Company earned revenues of $114,000, incurred $98,000 for various operating expenses, and distributed $5,600 in dividends. If retained earnings for the previous year was $34,600, what is retained earnings for the current year?

Question

Quizplus · Accepted Answer

Retained earnings for the current year is calculated as: Previous retained earnings + Net income - Dividends. Net income is $114,000 (revenues) - $98,000 (expenses) = $16,000. Therefore, retained earnings = $34,600 + $16,000 - $5,600 = $45,000.

During the Year, Roger Company Earned Revenues of $114,000, Incurred