Question

Sheridan Company began the year with retained earnings of $659000. During the year, the company recorded revenues of $600000, expenses of $380000, and paid dividends of $141500. What was Sheridan retained earnings at the end of the year?A. $1131500B. $600000C. $737500D. $1017500

Answer 1

Answer:

C. $737,500

Explanation:

The formula to compute the ending balance of retained earning is shown below:

The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

= $659,000 + $220,000 - $141,500

= $737,500

The net income is calculated below:

= Sales revenues - expenses

$600,000 - $380,000

= $220,000