Question

The Andrews company currently has the following balances in their equity accounts: Common Stock $59,934 Retained earnings $32,340 Suppose next year the Andrews company generates $46,300 in Net Profit, and declares and pays $16,000 in Dividends. What will Andrews ending balance in Retained Earnings be next year

Answer 1

the ending balance of the retained earnings is $62,640

Step-by-step explanation:

The computation of the ending balance of the retained earnings is shown below:

= Opening retained earning + net profit - dividends paid

= $32,340 + $46,300 - $16,000

= $62,640

hence, the ending balance of the retained earnings is $62,640

The above formula should be used