Question

the accountant for crusoe company is preparing the company's statement of cash flows for the fiscal year just ended. the following information is available: retained earnings balance at the beginning of the year $ 158,000 cash dividends declared for the year 48,000 proceeds from the sale of equipment 83,000 gain on the sale of equipment 7,400 net income for the year 94,000 what is the ending balance for retained earnings?

Answer 1

The ending balance for retained earnings for Crusoe Company is calculated by adding the net income for the year to the beginning balance and then subtracting the dividends declared. The resulting amount is $204,000.

Step-by-step explanation:

To calculate the ending balance for retained earnings for Crusoe Company, we need to take into account the following items: the beginning balance of retained earnings, net income, and dividends declared. Here is the calculation:

Start with the beginning balance of retained earnings: $158,000.

Add the net income for the year: $94,000.

Subtract the cash dividends declared for the year: $48,000.

Since gain on the sale of equipment is included in the net income, we do not need to adjust for it separately.

The ending balance for retained earnings is the sum of the first two steps minus the third step.

Therefore, the calculation is $158,000 (beginning balance) + $94,000 (net income) - $48,000 (dividends) = $204,000 (ending balance).