Question

14. On January 1, 2015 Chenlu Corporation had retained earnings of ¥4,000,000. During 2015, they reported net income of ¥750,000 and dividends of ¥100,000. What is the amount of Chenlu’s retained earnings at the end of 2009?

Answer 1

¥4,650,000

Step-by-step explanation:

We know that

The ending balance of retained earnings = Beginning year balance of retained earnings + net income reported - cash dividend paid

= ¥4,000,000 + ¥750,000 - ¥100,000

= ¥4,650,000

We simply added the net income and subtract the dividend amount to the beginning year balance of retained earning so that the ending balance of retained earnings can come