Question

On January 1, 2019 Miller Corporation had retained earnings of $8,000,000. During 2019, Miller reported net income of $1,500,000, declared dividends of $500,000, and had revenues of for $10,000,000. What were Miller's retained earnings on December 31, 2019? A) $9,000,000 B) $9,500,000 C) $17,500,000 D) $7,500,000

Answer 1

Answer:

Option (A) is correct.

Explanation:

Given that,

Beginning retained earnings = $8,000,000

Net income = $1,500,000

Dividend paid = $500,000

Revenues = $10,000,000

Ending retained earnings:  

= Beginning retained earnings + Net income - Dividend paid

= $8,000,000 + $1,500,000 - $500,000

= $9,000,000

Therefore, the Miller's retained earnings on December 31, 2019 is $9,000,000.