The Retained Earnings balance of Mantua Company was $128,700 on January 1, 2012. Net income for 2012 was $72,820. If Retained Earnings had a credit balance of $57,750 after closing entries were posted on December 31, 2012, and if additional stock of $35,750 was issued during the year, dividends declared during 2012 were

Question

Quizplus · Accepted Answer

The formula for calculating the ending Retained Earnings is:

Beginning Retained Earnings + Net Income - Dividends - Stock Issued = Ending Retained Earnings

Substituting the values given in the question:

$128,700 + $72,820 - Dividends - $35,750 = $57,750

Solving for dividends:

Dividends = $143,770

Therefore, the answer is B, $143,770.

The Retained Earnings Balance of Mantua Company Was $128,700 on January