A firm has a year-end retained earnings balance of $220,000 for 2014. The firm reported net profits after taxes of $50,000 and paid dividends of $30,000 in 2015. The firm's retained earnings balance at 2015 year end is ________.
A) $240,000
B) $250,000
C) $270,000
D) $300,000

Question

Quizplus · Accepted Answer

The retained earnings at the end of 2015 is calculated by adding the net profits after taxes ($50,000) to the 2014 retained earnings ($220,000) and then subtracting the dividends paid ($30,000): $220,000 + $50,000 - $30,000 = $240,000.

A Firm Has a Year-End Retained Earnings Balance of $220,000