Question

A Company had beginning retained earnings of $190,000, net income of $52,000, and

dividends of $52,000. The ending retained earnings is;

Answer 1

$190,000

Step-by-step explanation:

Retained earnings are the profits not distributed to shareholders as dividends. In a given period, retained earnings will be the difference between profits and dividends.

I.e., retained earning = profits - dividends.

Therefore, Ending retained earning can be calculated as

Beginning retained earning + profits - dividends.

In this case

retained earnings = $190,000 + $52,000 - $52,000

=$242,000 - $52,000

=$190,000