Ask Question
3 July, 03:33

The first year of operations for a company was Year 1. The net income for Year 1 was $20,900 and dividends of $12,450 were paid. In Year 2, the company reported net income of $34,900 and paid dividends of $5,450. At the end of Year 1, the company had total assets of $159,000. At the end of Year 2, the company had total assets of $ $249,000. Use the information above to answer the following question. What is the amount of retained earnings at the end of Year 2?

A) $240,000.

B) $269,000.

C) $29,000.

D) $37,000.

+3
Answers (1)
  1. 3 July, 06:10
    0
    The amount of retained earnings at the end of Year 2 is $37,900

    Explanation:

    The amount of retained earnings is calculated by using following formula:

    Amount of retained earnings = Net income - Dividends were paid

    In Year 1, the Amount of retained earnings = $20,900 - $12,450 = $8,450

    In Year 2, the Amount of retained earnings = $34,900 - $5,450 = $29,450

    The amount of retained earnings at the end of Year 2 = Amount of retained earnings for year 1 + Amount of retained earnings for year 2 = $8,450 + $29,450 = $37,900
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The first year of operations for a company was Year 1. The net income for Year 1 was $20,900 and dividends of $12,450 were paid. In Year 2, ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers