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A company had a beginning balance in retained earnings of $430,000. It had net income of $60,000 and paid out cash dividends of $56,250 in the current period. The ending balance in retained earnings equals:

Respuesta :

Samawati

Answer:

$433,750

Explanation:

Retained earnings are a part of income that has not been distributed to shareholders as dividends.  A company's net income is shared between dividends and retained earnings.

i.e., income = retained earnings + dividends

For this company:

net income =$60,000

cash dividends =$ 56,250

retained earnings will be :

$60,000 =$56,250 + retained earning

retained earning = $60,000 - $56,250

retained earnings = $3,750

Beginning retained earning balance =$430,000

Retained earnings for the year= $3,750.

Ending retained earnings = $430,000 + $,3 750

=$433,750

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