Question

Anderson Corporation had a credit balance of $43,000 in its Retained Earnings account on December 31, 2018. Net income of $6,000 was reported on its income statement for the year ended December 31, 2019. Dividends in the amount of $5,625 were declared on December 31, 2019 and are payable to the company's stockholders on February 1, 2020. The balance in its Retained Earnings account on December 31, 2019 equals _____.

Answer 1

$43,375

Step-by-step explanation:

Calculation to determine what The balance in its Retained Earnings account on December 31, 2019 equals

Using this formula

Ending retained earnings = Beginning retained earnings + Net income - Dividend declare

Let plug in the formula

Ending retained earnings= $ 43,000 + $ 6,000 - $ 5,625

Ending retained earnings= $ 49,000 - $ 5,625

Ending retained earnings= $ 43,375

Therefore The balance in its Retained Earnings account on December 31, 2019 equals $ 43,375