Question

LePage's has an ending Retained Earnings balance of $51,100. If during the year LePage's paid dividends of $4,300 and had net income of $22,500, then what was the beginning Retained Earnings balance?A. $24,300B. $32,900C. $300D. $69,300

Answer 1

Answer: Option (B) is correct.

Explanation:

Given that,

Ending Retained Earnings balance(current) = $51,100

Dividends = $4,300

Net income = $22,500

Current retained earnings = Beginning Retained Earnings + Net income - Dividends

Beginning Retained Earnings = Current retained earnings - Net income + Dividends

                                                  = $51,100 - $22,500 + $4,300

                                                  = $32,900