Crawford Company started the year with $30,000 in its Common Stock account and a credit balance in Retained Earnings of $22,000. During the year, the company earned net income of $24,000 and declared and paid $10,000 of dividends. In addition, the company sold additional common stock amounting to $14,000. As a result, the amount of its retained earnings at the end of the year would be
A) $80,000.
B) $36,000.
C) $66,000.
D) $50,000.

Question

Quizplus · Accepted Answer

The ending retained earnings is calculated as the beginning retained earnings ($22,000) plus net income ($24,000) minus dividends paid ($10,000), which equals $36,000.

Crawford Company Started the Year with $30,000 in Its Common