A company had a net loss of $1,200 during the year and paid dividends of $700. If the beginning of year addition to retained earnings was $8,400, what was the amount of retained earnings on the balance sheet at the end of the year?

Question

Quizplus · Accepted Answer

The ending retained earnings is calculated as the beginning retained earnings plus net income (or loss) minus dividends. Starting with $8,400, subtract the net loss of $1,200 and the dividends of $700, resulting in $6,500.

A Company Had a Net Loss of $1,200 During the Year