The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: What is the ending balance for retained earnings?
A)$264,000.
B)$13,000.
C)$243,000.
D)$197,000.
E)$105,000.

Question

The accountant for Huckleberry Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:  What is the ending balance for retained earnings?
A)$264,000. 
B)$13,000. 
C)$243,000. 
D)$197,000. 
E)$105,000.

Quizplus · Accepted Answer

The ending balance of retained earnings can be calculated by adding the beginning balance ($50,000) to the net income ($114,000) and then subtracting the dividends paid ($33,000). Therefore, the ending balance for retained earnings is $131,000. However, since the question asks for the ending balance of retained earnings after adjusting for a prior period adjustment, we need to subtract the prior period adjustment of $66,000. Therefore, the correct answer is $131,000 - $66,000 = $65,000. This corresponds to option D.

The Accountant for Huckleberry Company Is Preparing the Company's Statement