Retained Earnings Balance as of Jan 1, 2013 $257,000 Net income for year 2013 78
ID: 2568662 • Letter: R
Question
Retained Earnings
Balance as of Jan 1, 2013
$257,000
Net income for year 2013
78,000
Dividends declared for the year 2013
33,000
Dividends paid during the year 2013
37,000
Cash on hand at December 31, 2013
16,000
Required: Compute the ending balance for Retained Earnings on 12/31/13
Retained Earnings
Balance as of Jan 1, 2013
$257,000
Net income for year 2013
78,000
Dividends declared for the year 2013
33,000
Dividends paid during the year 2013
37,000
Cash on hand at December 31, 2013
16,000
Required: Compute the ending balance for Retained Earnings on 12/31/13
Explanation / Answer
Opening balance 257000
Add: Net income during the year : 78,000
Add: Dividend declared : 33,000
=257000+78000+33000=302000
Dividend paid during the year should have already been deducted from the retained earning , hence not considered foo calculating the closing balance.Also it can be related to previous years which should have been already deducted from retained earnings.