Question

Tiptoe shoes, had annual revenues of $185,000, expenses of $103,700, and paid dividends of $18,000 during the current year. The retained earnings account before closing had a balance of $297,000. The ending retained earnings balance after closing is:

Answer 1

$360,300 is the answer.

The ending earnings balance after closing is $360,300.

Further Explanation:

Retained earnings:

Retained earnings are an income of the company at the end of the year.

Dividends:

A dividend is a payment made to the shareholders of the company by the owner of the company. In simple words, dividend is a distribution of profit.

Expenses:

Expenses are the outflow of the firm or the amount paying for making the product or carrying out the business activities.

To compute the amount of ending retained earnings:

Step 1:

Add beginning retained earnings of $297,000 with revenues of $185,000 and subtract expenses of $103,700 and dividends of $18,000.

Ending retained earnings = Beginning retained earnings +Revenues – Expenses –  

                                               Dividends

                                           = $297,000 + $185,000 - $103,700 - $18,000

                                           = $360,300

Thus, the ending retained earnings balance after closing is $360,300.

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Answer Details:

Grade: High school

Chapter: Cash flow statements

Subject: Accounting

 

Keywords: Tiptoe shoes, had annual revenues of $185,000, expenses of $103,700, and paid dividends of $18,000 during the current year. The retained earnings account before closing had a balance of $297,000. The ending retained earnings balance after closing is, $360,300, carrying out a business, distribution of profit, income of the company at the end of the year.

Answer 2

Calculation of ending retained earnings balance after closing:

The balance in ending retained earnings after closing can be calculated as follows:

Balance in retained earnings account before closing $297,000

Add: Revenues $185,000

Less: Expenses $103,700

Less: Dividends $18,000

Ending retained earnings balance after closing = $360,300

Hence, The balance in ending retained earnings after closing is $360,300