If the beginning balance of Retained Earnings equals $10,000,net income for the year equals $6,000,and dividends for the year equal $2,000,then the ending balance of Retained Earnings equals $18,000.

Question

Quizplus · Accepted Answer

The ending balance of Retained Earnings is calculated as the beginning balance plus net income minus dividends. Therefore, $10,000 + $6,000 - $2,000 = $14,000, not $18,000.

If the Beginning Balance of Retained Earnings Equals $10,000,net Income