Question

8. A corporation reported a net income of $90,000 for its fiscal year and declared and paid cash dividends of $60,000. A stock dividend recorded at $30,000 was also distributed during the year. If the beginning balance of the Retained Earnings account was $140,000, the ending balance is:
A. $230,000.

B. $170,000.

C. $140,000.

D. $130,000.

Answer 1

what did you get here?

Answer 2

I had got b 170,000 but it ended up being wrong /:

Answer 3

think of it like this

they made $90 in revenue

but they paid out $60 + $30 = $90 in dividends

so how much did they really make?

Answer 4

140,000?

Answer 5

well they made $0 after all dividends are distributed

so they end up having the same balance of $140,000

Answer 6

oh so I was sorta right? (:

Answer 7

kinda

Answer 8

just $30,000 off

Answer 9

well as of my first answer, but 140,000 is the ending balance, yea?
..just making 100% sure

Answer 10

yes $140,000 is the ending balance

Answer 11

thank you for the help!
!

Answer 12

you're welcome