Garrison Industries Garrison Industries began operations on January 2,2014,with an investment of $50,000 by each of its two stockholders.Net income for its first year of business was $240,000.Garrison Industries paid a total of $100,000 in dividends to its stockholders during the year.
Read the information about Garrison Industries.What is the company's retained earnings balance at December 31,2014?

Question

Quizplus · Accepted Answer

Retained earnings are calculated as the net income minus dividends paid. For Garrison Industries, the retained earnings at December 31, 2014, would be $240,000 (net income) - $100,000 (dividends) = $140,000.

Garrison Industries Garrison Industries Began Operations on January 2,2014,with an Investment