Question

Consider the following information to calculate the balance of retained earnings at the end of May. Balance in retained earnings on April 30 $69,000 Dividends paid to stockholders during May $1,000 Revenues for the month of May $12,000 Expenses for the month of May 12,500 Select one: a. $43,500 b. $67,500 .$70,000 d. $94,500

Answer 1

b. $67,500

Step-by-step explanation:

`$$Beginning Retained Earnings$$$+/- Net Income/Loss$$$- Dividends$$$Equals Ending Retained Earning`

notice that you must calculate the net income before working with retained earnings

12000 revenues - 12,500 expenses = -500 net loss

Now we can work out the Retained Earning Ending Balance:

69,000

-500 Net Loss

-1,000 Dividends

67,500