A corporation has $40,000 of retained earnings at the beginning of the period. The company has net income of $5,000 and pays dividends of $30,000 during the period. What is the balance in retained earnings at the end of the period?

Question

Quizplus · Accepted Answer

The balance in retained earnings at the end of the period is calculated as beginning retained earnings + net income - dividends. Therefore, $40,000 + $5,000 - $30,000 = $15,000.

A Corporation Has $40,000 of Retained Earnings at the Beginning