Question

The accountant for Robinson Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year $ 164,500
Cash dividends declared for the year $ 54,500
Proceeds from the sale of equipment $ 89,500
Gain on the sale of equipment $ 8,700
Cash dividends payable at the beginning of the year $ 26,500
Cash dividends payable at the end of the year $ 50,200
Net income for the year $ 100,500


What is the ending balance for retained earnings?
a) $265,000.
b) $210,500.
c) $293,000.
d) $191,000.
e) $269,300.

Answer 1

Answer:

Option (b) $210,500

Explanation:

Data provided in the question:

Beginning Retained earnings balance = $164,500

Cash dividends declared for the year = $54,500

Proceeds from the sale of equipment = $89,500

Gain on the sale of equipment = $8,700

Cash dividends payable at the beginning of the year = $26,500

Cash dividends payable at the end of the year = $50,200

Net income for the year = $100,500

Now,

The ending balance for retained earnings

= Beginning Retained earnings balance + Net income - Cash dividends declared

= $164,500  + $100,500 - $54,500

= $210,500

Option (b) $210,500