Question

Quartz Instruments had retained earnings of $145,000 at December 31, 2017. Net income for 2018 was $90,000, and dividends for 2018 were $30,000. What amount of retained earnings should be reported at December 31, 2018?

Answer 1

Answer:

$205,000

Explanation:

We know that

The ending balance of retained earnings = Opening balance of retained earnings + net income earned - dividend paid

= $145,000 + $90,000 - $30,000

= $205,000

By considering the above formula, we can easily find out the ending balance of retained earnings  by taking opening balance, net income and dividend amount