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4vir4ik [10]
3 years ago
12

Crawford Company started the year with $60,000 in its Common Stock account and a credit balance in Retained Earnings of $44,000.

During the year, the company earned net income of $48,000 and declared and paid $20,000 of dividends. In addition, the company sold additional common stock amounting to $28,000. As a result, the amount of its retained earnings at the end of the year would be
a. $160,000
b. $72,000
c. $132,000
d. $100,00
Business
1 answer:
umka2103 [35]3 years ago
7 0

Answer:

b. $72,000

Explanation:

Retained EarningEnding Balance = Opening Balance of retained earning + net income - Dividend Declared

Retained EarningEnding Balance = $44,000 + $48,000 - $20,000

Retained EarningEnding Balance = $44,000 + $48,000 - $20,000

Retained EarningEnding Balance = $72,000

The issue of common stock will not effect retained earning account balance It will be credited to common stock account and add-in-capital common stock account.

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