For the year ended December 31, 2014, Transformers Inc. reported the following: What would Transformers report as the ending balance of Retained Earnings?
A) $417,000
B) $399,000
C) $384,000
D) $381,000

Question

For the year ended December 31, 2014, Transformers Inc. reported the following:  What would Transformers report as the ending balance of Retained Earnings?
A) $417,000 
B) $399,000 
C) $384,000 
D) $381,000

Quizplus · Accepted Answer

The ending balance of Retained Earnings can be calculated using the formula: 
Retained Earnings (end) = Retained Earnings (beginning) + Net Income - Dividends

Given: 
Retained Earnings (beginning) = $399,000 
Net Income = $18,000 
Dividends = $33,000

Using the formula above: 
Retained Earnings (end) = $399,000 + $18,000 - $33,000 
Retained Earnings (end) = $384,000

Therefore, the correct answer is C.

For the Year Ended December 31, 2014, Transformers Inc