The Dayton Corporation began the current year with a retained earnings balance of $32,000. During the year, the company corrected an error made in the prior year, which was a failure to record a depreciation expense of $3,000 on equipment. Also, during the current year, the company earned net income of $12,000 and declared cash dividends of $7,000. Compute the year-end retained earnings balance.

Question

Quizplus · Accepted Answer

Year-end retained earnings balance = Beginning retained earnings balance - Depreciation expense + Net income - Cash dividends = $32,000 - $3,000 + $12,000 - $7,000 = $34,000

The Dayton Corporation Began the Current Year with a Retained