Question

Nash's Trading Post, LLC began the year with retained earnings of $380000. During the year, the company recorded revenues of $480000, expenses of $375000, and paid dividends of $35000. What was Nash's,LLC retained earnings at the end of the year?

Answer 1

$450,000

Step-by-step explanation:

Profits that have not been distributed to shareholders are the retained earnings. Retained earnings are calculated by subtracting dividends paid out from the profits.

Accumulated retained is obtained by adding the opening balance of retained earnings to the earning in the period minus dividends paid out in that period.

i.e., Accumulated retained earning = beginning retained earning+ earnings - dividends.

For Nashi tradings,

Beginning retained earnings is $380,000

revenues are $480,000

expenses $375,000

Dividends paid out $35,000

Earning for the period will be $480,000 - $375,000=$105,000

retained earnings are the end of the year will be

= $380,000+$105,000 -$35,000

=$485,000 -$35,000

=$450,000