CN Company's balance sheet as of December 31, 2019 showed total assets of $510,000, and total liabilities of $210,000, and common stock of $192,000. During 2020, the company reported revenues of $192,000, expenses of $150,000, and paid dividends of $48,000.
What was the balance in the Retained Earnings account on January 1, 2021?

Question

Quizplus · Accepted Answer

2019 Ending retained earnings = Assets - Liabilities - Common stock
(X = $510,000 - $210,000 - $192,000 = $108,000)
2020 Beginning retained earnings = 2019 Ending retained earnings = $108,000
2020 Beginning retained earnings + Net income - Dividends = 2020 Ending retained earnings
($108,000 + ($192,000 - $150,000) - $48,000 = $102,000)
2021 Beginning retained earnings = 2020 Ending retained earnings = $102,000

CN Company's Balance Sheet as of December 31, 2019 Showed