Question

From the following data: Retained earnings, December 31, 2013 $ 340,800 Cost of buildings purchased during 2014 41,100 Net income for the year ended December 31, 2014 56,500 Dividends declared and paid in 2014 32,600 Increase in cash balance from January 1, 2014, to December 31, 2014 23,400 Increase in long-term debt in 2014 44,900 Required: Calculate the Retained Earnings balance as of December 31, 2014.

Answer 1

364,700

Step-by-step explanation:

Answer 2

RETAINED EARNINGS = $364,700

Step-by-step explanation:

Retained earnings are nothing but the profit that a corporation earns up to a specific date. In the question we have been given the retained earnings of the previous year ( 31 December, 2013) and we have to calculate the retained earnings for the present year (31 December, 2014). For this calculation would be like -

RETAINED EARNINGS ( 2013) - $340,800

+

NET PROFIT - $56,500

-

DIVIDEND PAID - $32,600

RETAINED EARNINGS (2014) = $340,800 + $56,500 - $32,600

= $364,700