Question

Anderson Corporation had a credit balance of $43,000 in its Retained Earnings account on December 31, 2014. Net income of $6,000 was reported on its income statement for the year ended December 31, 2015. Dividends in the amount of $5,625 were declared on December 31, 2015; the dividends are payable to the company's stockholders on February 1, 2016. The balance in its Retained Earnings account on December 31, 2015 equals _____.

Answer 1

The balance in its Retained Earnings account on December 31, 2015 equals $43,375

Step-by-step explanation:

Ending retained earnings = Beginning retained earnings + Net income - Dividend declare = $ 43,000 + $ 6,000 - $ 5,625

= $ 49,000 - $ 5,625

= $ 43,375

The balance in Anderson’s Retained Earnings account on December 31, 2019 is $ 43,375.