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29 May, 07:46

The accountant for Robinson Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:

Retained earnings balance at the beginning of the year $ 164,500

Cash dividends declared for the year $ 54,500

Proceeds from the sale of equipment $ 89,500

Gain on the sale of equipment $ 8,700

Cash dividends payable at the beginning of the year $ 26,500

Cash dividends payable at the end of the year $ 50,200

Net income for the year $ 100,500

What is the ending balance for retained earnings?

a) $265,000.

b) $210,500.

c) $293,000.

d) $191,000.

e) $269,300.

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Answers (1)
  1. 29 May, 11:19
    0
    Option (b) $210,500

    Explanation:

    Data provided in the question:

    Beginning Retained earnings balance = $164,500

    Cash dividends declared for the year = $54,500

    Proceeds from the sale of equipment = $89,500

    Gain on the sale of equipment = $8,700

    Cash dividends payable at the beginning of the year = $26,500

    Cash dividends payable at the end of the year = $50,200

    Net income for the year = $100,500

    Now,

    The ending balance for retained earnings

    = Beginning Retained earnings balance + Net income - Cash dividends declared

    = $164,500 + $100,500 - $54,500

    = $210,500

    Option (b) $210,500
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