The Don't Tread on Me Tire Company had retained earnings at December 31, 2010 of $200,000. During 2011, the company had revenues of $400,000 and expenses of $350,000, and the company declared and paid dividends of $11,000. Retained earnings on the balance sheet as of December 31, 2011 will be:

Question

Quizplus · Accepted Answer

To calculate the retained earnings for December 31, 2011, you need to add the beginning retained earnings to the net income and subtract the dividends paid. Beginning Retained Earnings + Net Income - Dividends Paid = Retained Earnings for December 31, 2011.

Beginning Retained Earnings = $200,000
Net Income = Revenues - Expenses = $400,000 - $350,000 = $50,000
Dividends Paid = $11,000

$200,000 + $50,000 - $11,000 = $239,000.

Therefore, the answer is B.

The Don't Tread on Me Tire Company Had Retained Earnings