Question

At December 31, 2014, Shorts Company had retained earnings of $2,184,000. During 2014, the company issued stock for $98,000, and paid dividends of $34,000. Net income for 2014 was $402,000. How much was the retained earnings balance at the beginning of 2014?

Answer 1

$1,816,000

Step-by-step explanation:

Answer 2

The retained earnings balance at the beginning of 2014 is $1,816,000

Step-by-step explanation:

In this question, we have to apply the ending retained earning formula which is shown below:

The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

$2,184,000 = Beginning balance of retained earnings + $402,000 - $34,000

$2,184,000 = Beginning balance of retained earnings + $368,000

So, the Beginning balance of retained earnings would equal to

= $2,184,000 - $368,000

= $1,816,000