Question

The following amounts represent totals from the first three years of operations. Calculate the balance of Retained Earnings at the end of 2021. 2019 2020 2021 Net Income (loss) $ 1,200 $ (500 ) $ 2,300 Net Cash Flows $ 500 $ 300 $ 2,800 Dividends $ 200 $ 0 $ 200 Issuance of Stock $ 2,000 $ 0 $ 0

Answer 1

Answer:

$2,600

Explanation:

         Statement of Retained earnings

                                            2019      2020       2021

Beginning balance                $0         $1,000       $500

Add: Net Income (Loss)      $1,200    ($500)       $2,300

Less: Dividends                  $200        $0           $200

Ending balance                 $1,000      $500       $2,600

Note: The ending balance of each year is c/f as beginning balance for the subsequent year