Question

At the end of Year 2, retained earnings for the Baker Company was $2,650. Revenue earned by the company in Year 2 was $2,900, expenses paid during the period were $1,550, and dividends paid during the period were $950. Based on this information alone, what was the amount of retained earnings at the beginning of Year 2

Answer 1

$2,250

Step-by-step explanation:

Calculation for the amount of retained earnings at the beginning of Year 2

Using this formula

Beginning retained earning =Revenue earned- Expensee- Dividend Paid- Ending retained earnings

Let plug in the formula

Beginning retained earning =$2,900-$1,550-$950-$2,650

Beginning retained earning =$2,250

Therefore the amount of retained earnings at the beginning of Year 2 will be $2,250