Question

During 2017, its first year of operations, Jane's Bakery had revenues of $130,000 and expenses of $66,000. Retained earnings at the beginning of 2017 were $0 and during 2017, the business paid cash dividends of $36,000 . What is the balance in Retained Earnings at December 31, 2017? $0 $36,000 $28,000 $64,000

Answer 1

$28,000

Step-by-step explanation:

Ending retained earnings = beginning retained earning + current earnings - dividends paid out.

for Jane's Bakery,

Beginning retained earning 0,

Dividends : $36,000

earnings = revenues - expenses

earnings = $130,000 - $ 66,000

=64,000

ending retained earnings = 0+$64,000- $36,000

=$28,000