Mary Company had the following data available:
$\begin{array} { l }
\text {Paid-in capital, December 31, 2014 }&\$43,000 \
\text { Retained earnings, December 31,2014}&\$27,000 \
\text { Net income for the year ended December 31,2015 }&\$ 35,400\
\text { Dividends declared in 2015}&\$ 20,000\
\end{array}$

What is the balance in Retained Earnings on December 31,2015?
A) $23,400
B) $42,400
C) $52,400
D) $66,400

Question

Mary Company had the following data available:
$\begin{array} { l  }
 \text {Paid-in capital, December 31, 2014 }&\$43,000 \
 \text { Retained earnings, December 31,2014}&\$27,000 \
 \text { Net income for the year ended December 31,2015 }&\$ 35,400\
 \text { Dividends declared in 2015}&\$ 20,000\
\end{array}$

What is the balance in Retained Earnings on December 31,2015?
A) $23,400
B) $42,400
C) $52,400
D) $66,400

Quizplus · Accepted Answer

The balance in Retained Earnings on December 31, 2015, is calculated by starting with the Retained Earnings at the beginning of the year ($27,000), adding the Net Income for the year ($35,400), and subtracting the Dividends declared ($20,000). This results in $27,000 + $35,400 - $20,000 = $42,400.

Mary Company Had the Following Data Available What Is the Balance in Retained Earnings on December 31,2015