Question

A company had a beginning balance in retained earnings of $44,500. it had net income of $7,500 and declared and paid cash dividends of $6,000 in the current period. the ending balance in retained earnings equals:

O $13,500.
O $58,000.
O $46,000.
O $6,000.
O $43,000.

Answer 1

The ending balance in retained earnings is calculated by starting with the beginning balance, adding net income, and subtracting dividends paid. The ending balance in this scenario is $46,000.

Step-by-step explanation:

The ending balance in retained earnings for a company can be calculated by adding net income and then subtracting declared dividends from the beginning balance.

Here's the calculation:

Beginning Retained Earnings: $44,500
Plus: Net Income: $7,500
Less: Dividends: $6,000
Ending Retained Earnings: $46,000

Therefore, the ending balance in retained earnings equals $46,000.