A corporation reported a net income of $120,000 for its fiscal year and declared and paid cash dividends of $60,000. A stock dividend recorded at $40,000 was also distributed during the year. If the ending balance of the Retained Earnings account was $200,000, the beginning balance is

Question

Quizplus · Accepted Answer

The beginning balance of Retained Earnings can be calculated as follows:
Beginning Balance + Net Income - Dividends - Stock Dividend = Ending Balance
Therefore, Beginning Balance = Ending Balance - Net Income + Dividends + Stock Dividend
= $200,000 - $120,000 + $60,000 + $40,000
= $180,000.

A Corporation Reported a Net Income of $120,000 for Its