Question

Coronado Industries began the year 2022 with retained earnings of $661000. During the year, the company sold additional shares of stock for $1011000, recorded revenues of $621000, expenses of $377000, and paid dividends of $137000. What was Coronado's retained earnings balance at the end of 2022

Answer 1

Answer:

The Coronado`s Retaining Earnings Balance is at end of 2022 is $ 808 000

Explanation:

Retained Earnings at the end of the year is calculated by adding together The Retained Earning at the Beginning of the Period, the Distributive Profit for the year ( Profit for the year after Interest and tax), then subtracting the dividends paid during the year.

From the question Retained Earnings at the Beginning of the year was provided at $661000.

The Distributive Profit needed a calculation. Revenue minus Expenses gives us profit.Expenses here include ALL trading, operating interest and tax expenses. This give is a Distributive Profit of $ 284000 ( $621000-337000). The $1011000 is disregard in calculation of profit and only Revenues that match with expenses are regarded (Accrual Principle).

The dividend paid was provided for at $ 137000.

This the Retained Earnings figure at end of 2020 is $808000( 661000+284000-137000)