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26 February, 17:38

For the year ending December 31, 2020, Monty Corp. reports net income $130,000 and cash dividends $81,000. Determine the balance in retained earnings at December 31 assuming the balance in retained earnings on January 1, 2020, was $215,000. (List items that increase retained earnings first.)

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  1. 26 February, 19:32
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    The balance in retained earnings at December 31 is $264,000.00

    Explanation:

    The balance in retained earnings at December 31 can be computed using the below ending retained earnings formula:

    ending retained earnings=beginning retained earnings+net income-dividends

    beginning retained earnings was the opening balance of retained earnings at January 1 2020 which was $215,000

    net income for the year is $130,000

    dividends of $81,000 were paid

    ending retained earnings=$215,000+$130,000-$81,000=$ 264,000.00
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