Question

In the first year of operation, Cougar Corp. recorded $35,000 in net income and paid $7,000 in dividends. What is the balance of retained earnings at the end of the year after all closing entries?

Answer 1

$28,000

Step-by-step explanation:

The net income for Cougar corporation is $35,000

The dividend is $7,000

Therefore the retained savings can be calculated as follows

= $35,000-$7,000

= $28,000

Hence the retained earnings at the end of the year is $28,000