Question

Oak Tree Paper Company suffered a net loss of $3,200 during 20Y5. The company had beginning retained earnings of $7,400. The company also paid $900 in dividends during the year. Prepare the company's retained earnings statement for the year ended March 31, 20Y5.

Answer 1

To prepare the retained earnings statement for Oak Tree Paper Company, we begin with the beginning retained earnings ($7,400), subtract the net loss ($3,200), and dividends paid ($900) to find the end balance ($3,300).

Step-by-step explanation:

To prepare the retained earnings statement for Oak Tree Paper Company for the year ended March 31, 20Y5, we start with the beginning retained earnings balance. Next, we adjust for the net loss and any dividends paid during the year.

Retained Earnings Statement for Oak Tree Paper Company

For the Year Ended March 31, 20Y5

Beginning Retained Earnings: $7,400

Net Loss: ($3,200)

Dividends Paid: ($900)

Retained Earnings, End of Year: $3,300

Retained Earnings at the start of the year were $7,400. After accounting for the net loss of $3,200 and subtracting the dividends of $900, the Retained Earnings at the end of the year are $3,300 ($7,400 - $3,200 - $900 = $3,300).