Retained earnings at December 31, 2014 is
A) £30,000.
B) £44,000.
C) £54,000.
D) £110,000.

Question

Quizplus · Accepted Answer

Retained earnings at December 31, 2014 can be calculated by adding the net income for the year with the beginning balance of retained earnings and subtracting any dividends paid. 
Beginning retained earnings: £20,000 
Net income for the year: £34,000 
Dividends paid: £-2,000 
£20,000 + £34,000 - £2,000 = £52,000 
Therefore, the closest answer choice is C) £54,000.

Retained Earnings at December 31, 2014 Is