Question

Blossom Company began the year with retained earnings of $390000. During the year, the company recorded revenues of $489000, expenses of $379000, and paid dividends of $44500. What was Blossom's retained earnings balance at the end of the year

Answer 1

Answer:

$455,500

Explanation:

Retained Earnings are profits that have not been distributed as dividends to shareholders.  Dividends shared plus retained earning add up the total earnings by a company.

Retained earnings =  profits - dividends shared

In the year revenues were $489, 000

expenses were $379,000

profits were $489,000 - $379,000 =$110,000

The dividends paid in the year were $44,500. It means the retained earnings in the year are $65,000( $110,000 - $44500)

Retained earning in the year will be beginning retained earning plus year's retained earnings.

=$390,000 + $44,500

=$455,500