Question

Z, Corp. began the year 2008 with $2.7 million in retained earnings. The firm earned net income of $7.6 million in 2008 and paid $2.83 million to its common stockholders. What is the year-end 2008 balance in retained earnings for Z?

Answer 1

$7.47 million

Step-by-step explanation:

Given that,

Beginning retained earnings = $2.7 million

Net income earned = $7.6 million

Dividend paid to common stockholders = $2.83 million

Year-end 2008 balance in retained earnings for Z:

= Beginning retained earnings + Net Income - Dividend paid

= $2.7 million + $7.6 million - $2.83 million

= $7.47 million