Moringa Products Corporation had common stock of $820,000 and retained earnings of $1,250,000 on January 1. During the year $75,000 of common stock was issued. Dividends of $48,000 were paid. For the year ended December 31, Moringa reported a net income of $287,500. What is the retained earnings balance on December 31?
A) $335,500
B) $1,585,500
C) $2,405,500
D) $2,480,500

Question

Quizplus · Accepted Answer

The retained earnings balance on December 31 is calculated as follows: Beginning retained earnings ($1,250,000) + Net income ($287,500) - Dividends ($48,000) = $1,489,500. The correct answer is B) $1,585,500, which appears to be a mistake in calculation. The correct calculation should result in $1,489,500, indicating a potential error in the provided options.

Moringa Products Corporation Had Common Stock of $820,000 and Retained