At the beginning of the current year,Wilson Corporation had 200,000 shares of $1 par common stock outstanding and had retained earnings of $4,800,000.During the year,the company earned $1,675,000 and paid a year-end cash dividend of $3 per share.What was Wilson Corporation's retained earnings at the end of the year?

Question

Quizplus · Accepted Answer

The retained earnings at the end of the year are calculated by adding the net income for the year to the beginning retained earnings and then subtracting the dividends paid. Here, the beginning retained earnings are $4,800,000, the net income is $1,675,000, and the dividends paid are $3 per share on 200,000 shares, totaling $600,000. So, the calculation is $4,800,000 + $1,675,000 - $600,000 = $5,875,000.

At the Beginning of the Current Year,Wilson Corporation Had 200,000