Question 1
The company has net income for the year of $180,000. The balance in Retained Earnings at the beginning of the year is $130,000. The company declared dividends of $60,000 during the year. What is the ending balance in Retained Earnings?
Hint: you may find it helpful to use a t-account as you work through this question.
Correct answer. The following numbers are in thousand. B.B. of RE (130) + Net Income (180) – Dividends Declared (60) = E.B. of RE (250).
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