Sooner Company had a net income of $8,000,$5,000,$12,000,and $10,000 over the first four years of the company's existence.If the average annual amount of dividends paid over the last four years is $3,000,what is the ending retained earnings balance?
A)$47,000.
B)$35,000.
C)$23,000.

Question

Quizplus · Accepted Answer

The total net income over the four years is $8,000 + $5,000 + $12,000 + $10,000 = $35,000. The total dividends paid over the four years is $3,000 * 4 = $12,000. Therefore, the ending retained earnings balance is $35,000 (total net income) - $12,000 (total dividends paid) = $23,000.

Sooner Company Had a Net Income of $8,000,$5,000,$12,000,and $10,000 Over