Question

Lopez Company has Retained Earnings of $48,000 at the end of March, 2020. During the month of April, Lopez has revenues of $72,000 and total operating expenses of $52,000. Lopez also pays its shareholders dividends of $10,000 on April 30. What is Lopez Ending RE = Beg. RE+NI - Div = Beg. RE + (Rev - Exp) - Div = 10,000 + (70,00 0-85,000) - 5,000 = (10,000) Company's ending balance of Retained Earnings on April 30?

Answer 1

Answer: $58,000

Step-by-step explanation:

Ending retained earnings = Beginning retained earnings + Net income - Dividends

Net income = Revenues - Operating expenses

= 72,000 - 52,000

= $20,000

Ending retained earnings = 48,000 + 20,000 - 10,000

= $58,000