Statement of Retained Earnings Night Scapes,Corp.began the year 2013 with $10 million in retained earnings.The firm suffered a net loss of $2 million in 2013 and yet paid $2 million to its preferred stockholders and $1 million to its common stockholders.What is the year-end 2013 balance in retained earnings for Night Scapes?
A)$5 million
B)$8 million
C)$9 million
D)$15 million

Question

Quizplus · Accepted Answer

The beginning retained earnings were $10 million. The net loss was $2 million, reducing retained earnings to $8 million. Payments to preferred and common stockholders totaled $3 million, further reducing retained earnings to $5 million.