DW has an ending Retained Earnings balance of $51,400. If during the year DW paid dividends of $4,000 and had net income of $21,600, then what was the beginning Retained Earnings balance?

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25 July, 13:15

DW has an ending Retained Earnings balance of $51,400. If during the year DW paid dividends of $4,000 and had net income of $21,600, then what was the beginning Retained Earnings balance?

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Krista · Answer 1

Retained Earnings at the Beginning was $ 33.800

Explanation:

The retained earnings is the value of Net Income that the company didn't distribute with the shareholders, so each year that the company keeps its results in retained earnings it grows in value.

The other option is to pay dividends or make investments using these reserves of money, in this case, the company start with a Retained Earnings of $33.800 to finish the year with $51.400, See details below:

(Ret. Earnings at the Beginnig) $33.800 - $4.000 + $21.600 = $51.400 End