Clothing Emporium was organized on January 1,2018.The firm was authorized to issue 100,000 shares of $5 par value common stock.During 2018,Clothing Emporium had the following transactions relating to shareholders' equity: Issued 30,000 shares of common stock at $7 per share.Issued 20,000 shares of common stock at $8 per share.Reported a net income of $100,000.Paid dividends of $50,000.What is the ending balance in the Retained Earnings account at the end of 2018?

Question

Quizplus · Accepted Answer

The ending balance in the Retained Earnings account is calculated by starting with the beginning balance (which is $0 since the company was organized on January 1, 2018), adding net income, and subtracting dividends paid. Therefore, the calculation is $0 + $100,000 - $50,000 = $50,000.

Clothing Emporium Was Organized on January 1,2018