At december 31, 2017, shorts company had retained earnings of $2,184,000. during 2017, the company issued stock for $98,000, and paid dividends of $34,000. net income for 2017 was $402,000.
how much was the retained earnings balance at the beginning of 2017?
a) $2,552,000
b) $2,454,000
c) $1,816,000
d) $1,914,000

Beginning retained earnings = $1816000

so correct option is C) $1,816,000

Explanation:

given data

retained earning = $2,184,000

issued stock = $98,000

paid dividends = $34,000

Net income = $402,000

to find out

retained earnings balance

solution

we know that Ending retained earnings equation is

Beginning retained earnings + Net income - Dividends = Ending retained earnings

put here value we get

Beginning retained earnings

so

Beginning retained earnings + $402,000 - $34,000 = $2,184,000

Beginning retained earnings = $1816000

so correct option is C) $1,816,000

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