Brief Exercise 10-11 (Algo) Calculate retained earnings (LO10–5) Diamond Dresses began the year with a balance of $492,000 in Retained Earnings. During the year, the company had net income of $107,000 and declared no dividends. (a) Calculate the ending balance of Retained Earnings. (b) Now assume the company declared dividends of $38,000. Calculate the ending balance of Retained Earnings.

Brief Exercise 10-11 (Algo) Calculate retained earnings (LO10–5) Diamond Dresses began the year with a balance of $492,000 in Retained Earnings. During the year, the company had net income of $107,000 and declared no dividends. (a) Calculate the ending balance of Retained Earnings. (b) Now assume the company declared dividends of $38,000. Calculate the ending balance of Retained Earnings.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

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Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 15EA: Farmington Corporation began the year with a retained earnings balance of $20,000. The company paid...

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Brief Exercise 10-11 (Algo) Calculate retained earnings (LO10–5)

Diamond Dresses began the year with a balance of $492,000 in Retained Earnings. During the year, the company had net income of $107,000 and declared no dividends.

(a) Calculate the ending balance of Retained Earnings.
(b) Now assume the company declared dividends of $38,000. Calculate the ending balance of Retained Earnings.

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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