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Gre4nikov [31]
4 years ago
11

The Don't Tread on Me Tire Company had retained earnings at December 31, 2015 of $217,000. During 2016, the company had revenues

of $417,000 and expenses of $358,500, and the company declared and paid dividends of $12,700. Retained earnings on the balance sheet as of December 31, 2016 will be_____________.
a. $275,500.
b. $45,800.
c. $262,800.
d. $321,300
Business
1 answer:
joja [24]4 years ago
3 0

<u>Given:</u>

Beginning retained earnings = $217,000

Revenues = $417,000

Expenses = $358,500

Dividends = $12,700

<u>To find:</u>

Ending retained earnings

<u>Solution:</u>

To calculate the ending retained earnings first we have to calculate the net income of the company. The formula to calculate the net income is as follows,

\bold{\text{Net income = Revenues - Expenses}}

On plugging in the values in the above formula we get,

\Rightarrow \$417,000 - \$358,500 = \$58,500

The formula to calculate the ending retained earnings is as follows,

\bold{\text{Ending retained earnings = Beginning retained earnings + Net income - Dividends}}

\Rightarrow \$217,000 + \$58,500 - \$12,700 = \$262,800

Therefore, the retained earnings on the balance sheet as of December 31, 2016 will be $262,800 that is option c.

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Here is the complete question with options

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