Question

In the statement of stockholders' equity, Retained Earnings had a beginning balance of $25,000. During the period the company reports a net income of $10,000 and a dividend of $4,000. The ending balance in the Retained tarnings account is A. $10,000 B. $35,000 C. $39,000 D. $31,000

Answer 1

$31,000

Step-by-step explanation:

Retained earnings are the undistributed profits. Together with dividends, retained earning make up the company's total earnings.

obtaining retained earning is by the formula

Ending retained earnings = Retained Earning opening Balance + Net income - Dividend Paid.

In this scenario:

Beginning balance: $25,000

Net income : $10,000

Dividends: $4,000

Ending retained earnings will be:

Ending retained earning =$25,000+$10,000-$4,000

=$35,000 - $4000

=$31,000