At January 1, 2015, Jay Corporation had a credit balance of $5,450,000 in its retained earnings account.During the year, Jay paid $250,000 in dividends, reported profit of $560,000 and other comprehensive income of $750,000.The December 31 balance of retained earnings is
A)$5,760,000.
B)$5,950,000.
C)$6,200,000.
D)$6,450,000.

Question

Quizplus · Accepted Answer

The retained earnings at the end of the year is calculated by adding the profit to the beginning retained earnings and subtracting the dividends paid. Other comprehensive income does not affect retained earnings. Therefore, $5,450,000 + $560,000 - $250,000 = $5,760,000.

At January 1, 2015, Jay Corporation Had a Credit Balance