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30 June, 22:23

The Don't Tread on Me Tire Company had retained earnings at December 31, 2015 of $202,000. During 2016, the company had revenues of $402,000 and expenses of $351,000, and the company declared and paid dividends of $11,200. Retained earnings on the balance sheet as of December 31, 2016 will be:

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  1. 30 June, 22:54
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    The answer is $241,800

    Explanation:

    Step 1:

    We need to find Net income.

    Net income = Revenue - expense

    $402,000 - $351,000

    Net income is $51,000

    Step 2.

    Closing/ending retained earnings = beginning/starting retained earnings plus net income minus dividend.

    = $202,000 + $51,000 - $11,200

    =$241,800

    Therefore, Retained earnings on the balance sheet as of December 31, 2016 is $241,800
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