At the beginning of the current year, Fred Company had the following balances in their stockholders' equity accounts as of December 31, 20X5: Paid-in capital $\quad \$ 43,000$
Retained earnings 27,000
During the year ended December 31, 20X6, Fred Company generated $35,400 in net income, and declared and paid $10,000 in dividends.The ending balance in the Retained Earnings account at December 31, 20X6 is_____.
A)$23,400
B)$27,000
C)$52,400
D)$66,400

Question

At the beginning of the current year, Fred Company had the following balances in their stockholders' equity accounts as of December 31, 20X5: Paid-in capital $\quad \$ 43,000$
Retained earnings 27,000 
During the year ended December 31, 20X6, Fred Company generated $35,400 in net income, and declared and paid $10,000 in dividends.The ending balance in the Retained Earnings account at December 31, 20X6 is_____.
A)$23,400
B)$27,000
C)$52,400
D)$66,400

Quizplus · Accepted Answer

The ending balance in the Retained Earnings account is calculated by starting with the beginning balance, adding net income for the year, and subtracting dividends paid. Therefore, the calculation is $27,000 (beginning balance) + $35,400 (net income) - $10,000 (dividends) = $52,400.

At the Beginning of the Current Year, Fred Company Had $43,000\quad \$ 43,000$43,000

At the Beginning of the Current Year, Fred Company Had $\quad \$ 43,000$