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HUD, Co. had a beginning retained earnings of $28,265. For the year, the company had net income of $5,140 and paid dividends of $1,790. The company also issued $3,290 in new stock during the year. What is the ending retained earnings balance

Respuesta :

Answer:

$28,325

Explanation

Retained earnings refer to the profits the company has after the dividends have been paid and the formula to calculate it is:

Retained Earnings= Beginning Period Retained Earnings + Net Income/Loss – Cash Dividends – Stock Dividends

Beginning Period Retained Earnings= $28,265

Net Income= $5,140

Cash Dividends= $1,790

Stock Dividends= $3,290

Now, you could replace the values in the formula:

Retained Earnings=$28,265+$5,140-$1,790-$3,290

Retained Earnings=$28,325

According to this, the ending retained earning balance is: $28,325.

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