The Candy Company had beginning retained earnings of $5,000, net income of $3,000, and paid dividends of $1,000 to their stockholders. Therefore, the ending retained Earnings is $7,000.

Question

Quizplus · Accepted Answer

Retained earnings at the end of the period can be calculated as: Beginning retained earnings + net income - dividends paid. Using the numbers given in the question, we get:

$5,000 + $3,000 - $1,000 = $7,000

Therefore, the ending retained earnings is $7,000 and the answer is A (true).

The Candy Company Had Beginning Retained Earnings of $5,000, Net