Question

At the end of 2013, retained earnings for the bisk company was $2,550. revenue earned by the company in 2013 was $2,800, expenses paid during the period were $1,500, and dividends paid during the period were $900. based on this information alone, retained earnings at the beginning of 2013 was

Answer 1

The retained earning in the beginning of 2013 will be calculated as under.

Given,

Ending retained earnings = $ 2,550

Income earned during the year = Revenue - Expenses

Income earned during the year = $ 2,800 - $ 1,500

Income earned during the year = $ 1,300

Dividends paid = $ 900

Ending retained earnings = Beginning retained earnings + Net Income - Dividends paid

$ 2,550 = Beginning retained earnings + $ 1,300 - $ 900

Beginning retained earnings = $ 2,550 - $ 400 = $ 2,150

Beginning retained earnings = $ 2,150