On January 1, Polk Corporation's Retained Earnings account had a balance of $625,000. During the year, cash dividends of $27,000 and stock dividends with a market value of $53,000 were declared and distributed. Polk Corporation reported a net loss of $7,000 for the year. What is the balance in Retained Earnings on December 31?

Question

Quizplus · Accepted Answer

The balance in Retained Earnings is calculated by subtracting the cash dividends, stock dividends, and net loss from the beginning balance. Starting with $625,000, subtract $27,000 (cash dividends), $53,000 (stock dividends), and $7,000 (net loss), resulting in a balance of $538,000.

On January 1, Polk Corporation's Retained Earnings Account Had a Balance