Question

At the end of the year, Green Company had retained earnings of $2,640,000. During the year, the company issued stock for $120,000 and paid dividends of $25,000. Net income for the year was $412,000. How much was the retained earnings balance at the beginning of the same year

Answer 1

The retained earnings at the beginning of the year was $ 2,253,000 .

Step-by-step explanation:

Retained earnings at the end of the year = Retained earnings at the beginning of the year + Net income - Dividends

Retained earnings at the beginning = Retained earnings at the end of the year - Net income + Dividends

= $2,640,000 - $412,000 + $25,000

= $ 2,253,000

Therefore, the retained earnings at the beginning of the year was $ 2,253,000 .