Question

On January 1, 2016, Miller Corporation had retained earnings of $8,000,000. During 2016, Miller reported net income of $1,500,000, declared dividends of $500,000, and issued common stock for $1,000,000. What were Miller's retained earnings on December 31, 2016?

Answer 1

Miller's retained earnings on December 31, 2016 is $9,000,000.

Step-by-step explanation:

Miller's retained earnings on 31 December 2016 = retained earnings on January 1, 2016 + net income - declared dividends

= $8,000,000 + $1,500,000 - $500,000

= $ 9,000,000

Therefore, Miller's retained earnings on December 31, 2016 is $9,000,000.