The Toy Store has beginning retained earnings of $318,423.For the year,the company earned net income of $11,318 and paid dividends of $7,500.The company also issued $25,000 worth of new stock.What is the value of the retained earnings account at the end of the year?

Question

Quizplus · Accepted Answer

The retained earnings at the end of the year can be calculated using the formula:

Retained earnings = Beginning retained earnings + Net income - Dividends

Plugging in the given values, we get:

Retained earnings = 318,423 + 11,318 - 7,500 = 322,241

Since the company also issued new stock, the total equity would have increased, but this does not affect the value of retained earnings. Therefore, the answer is D) $322,241.

The Toy Store Has Beginning Retained Earnings of $318,423