Question

At the beginning of the year, Sigma Company's balance sheet reported Total Assets of $258,000 and Total Liabilities of $19,900 and Total Paid-in capital of $79,600. During the year, the company reported total revenues of $303,000 and expenses of $234,500. Also, dividends during the year totaled $62,000. Assuming no other changes to Retained earnings, the balance in the Retained earnings account at the end of the year would be:

Answer 1

$165,000

Step-by-step explanation:

Opening retained earnings:

= Total assets - Total liabilities - Paid in Capital

= $258,000 - $19,900 - $79,600

= $158,500

Closing retained earnings:

= Opening retained earnings + Total revenues - Expenses - Dividends

= $158,500 + $303,000 - $234,500 - $62,000

= $165,000

Therefore, the balance in the Retained earnings account at the end of the year would be $165,000.