Question

On January 1, Payson Inc. had a retained earnings balance of $20,000. During the year, Payson reported net income of $30,000 and paid cash dividends of $17,000. Calculate the retained earnings balance at its December 31 year-end.

Answer 1

Answer:

=$33,000

Explanation:

Retained earnings will be the total income minus the dividend paid. For Payson inc. The retained earning as at 31st Dec 2104 will be

net income - divided paid out

=$30,000-$17,000

=$13,000

Total retained earnings as of 31st Dec will be

$13,000 + $20,000

=$33,000