Question

A company paid dividends of $15,000, generated total sales of $845,000, and incurred total expenses of $792,000 in the current year. If ending retained earnings is $165,000, what was beginning retained earnings?

Answer 1

The beginning retained earnings will be "127,000".

Step-by-step explanation:

The given values are:

Total sales,

= $845,000

Company paid,

= $15,000

Total expenses,

= $792,000

Retained earning,

= $165,000

Now,

⇒
`Retained \ earning \ this \ year = Profits-Dividends`

⇒
`=845,000-792,000 -$15,000`

⇒
`=38,000`

and,

⇒
`Beginning \ retained \ earnings = Ending \ RE-this \ year \ RE`

⇒
`=165,000-38,000`

⇒
`=127,000`