Lowell Inc. reports net income for fiscal 2014 of $4,000 million, retained earni

Question

Lowell Inc. reports net income for fiscal 2014 of $4,000 million, retained earnings at the end of the year of $32,000 million, dividends during the year of $2,000 million and other transactions that increased retained earnings by $1000 million.

What was the company's retained earnings balance at the start of fiscal 2014?

$30,000 million

$31,000 million

$29,000 million

There is not enough information to calculate the ratio

$30,000 million

$31,000 million

$29,000 million

There is not enough information to calculate the ratio

Explanation / Answer

Ending retained earnings=retained earnings balance at the start of fiscal 2014+net income+other transactions-dividends

32000=retained earnings balance at the start of fiscal 2014+4000+1000-2000

retained earnings balance at the start of fiscal 2014=32000-3000=29000 million

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