:23 PM/ Remaining: 40 min CALCULATOR PRINTER VERSION BACK NEXT Multiple Choice Q

Question

:23 PM/ Remaining: 40 min CALCULATOR PRINTER VERSION BACK NEXT Multiple Choice Question 85 Vaughn Manufacturing started the year with $61200 in its Common Stock account and a credit balance in Retained Earnings of $44900. During the year, the company earned net income of $49000 and declared and paid $20400 of dividends. In addition, the company sold additional common stock amounting to $28600. As a result, the amount of its retained earnings at the end of the year would be O $163200. $10200o $73500 o $134600.

Explanation / Answer

Opening Balance of Retained Earnings was $44,900

Profit for the year will be added and the dividend declraed and paid will be deducted to arrive at the year end balance

Retained Earnings year end balance= $44,900+$49,000-$20,400

= $73,500

So the amount of retained earnings will be $73,500

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