On January 1, Kimberling Corporation's Retained Earnings account had a balance of $400,000. During the year, the board of directors declared cash dividends of $50,000 and small stock dividends with a market value of $40,000. Net income for the year amounted to $120,000. What is the balance in Retained Earnings appearing on the statement of stockholders' equity on December 31?

Question

Quizplus · Accepted Answer

Retained earnings at the beginning of the year = $400,000
Add: Net Income = $120,000
Less: Cash dividends declared = $50,000
Market value of small stock dividends = $40,000
Total deductions = $90,000

Therefore, Retained earnings at the end of the year = $400,000 + $120,000 - $90,000 = $430,000. Hence, the correct answer is choice C.

On January 1, Kimberling Corporation's Retained Earnings Account Had a Balance