Marcos Inc.had net income for 2017 of $40,000.It declared and paid a $3,500 cash dividend in 2017.If the company's retained earnings for the end of the year was $38,200,what was the company's retained earnings balance at the beginning of 2017?
A)$81,700
B)$74,700
C)$5,300
D)$1,700

Question

Quizplus · Accepted Answer

The beginning retained earnings balance can be calculated by taking the ending retained earnings balance, subtracting the net income, and adding back the dividends paid. So, $38,200 - $40,000 + $3,500 = $1,700.