On January 1, 2014, Aster Motors Inc.’s retained earnings were $57,000. During the year, it paid dividends of $32,000 and earned

Question

3 years ago

10

On January 1, 2014, Aster Motors Inc.’s retained earnings were $57,000. During the year, it paid dividends of $32,000 and earned

a net income of $30,000. What is the retained earning of Aster Inc. for the year that ended December 31, 2014? A. $55,000 B. $59,000 C. $112,000 D. $25,000

Business

1 answer:

Makovka662 [10] · Answer 1 · 2022-07-03T20:17:12+03:00

Answer:

A. $55,000

Explanation:

Retain earning in the end of the year is calculated by:

RE = BRE + NI ( Loss) – PD

where:

RE= Retained earning in the end of period
BRE= Beginning period of Retained earning
NI = Net Income
PD= Paid dividend ( including Cash dividend and Stock dividend)

Thus:

RE = 57,000 + 30,000-32,000 = $55,000