Question

Retained earnings, December 31, 2019 $ 348,600

Cost of buildings purchased during 2020 42,700
Net income for the year ended December 31, 2020 55,300
Dividends declared and paid in 2020 32,600
Increase in cash balance from January 1, 2020, to December 31, 2020 23,500
Increase in long-term debt in 2020 45,300
Required: From the above data, calculate the Retained Earnings balance as of December 31, 2020

Answer 1

See below

Step-by-step explanation:

Computation of retained earnings balance as of December 31, 2020

= Retained earnings December 31, 2019 + Net income for the year ended, December 31, 2020 - Dividends declared and paid in 2020

= $348,600 + $55,300 - $32,600

= $371,300

Therefore, the retained earnings balance as of December 31, 2020 is $371,300