Question

Electra Corp had Retained Earnings in 2017 of $750 million. In 2018, they recognized Net Income of $45 million and paid dividends of $10 million. Accordingly, their Retained Earnings in 2018 should be ________.

Answer 1

$785 million

Step-by-step explanation:

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

The closing balance of retained earning = Opening balance of retained earnings + net income earned - dividend paid

= $750 million + $45 million - $10 million

= $785 million

While calculating the ending balance we have to deduct only dividend amount and other amounts are to be added