Tantramar Corporation has the following shareholders equity on July 31, 2013:
-Assume that during the following year the company had profit of $65,000 and declared and paid dividends of $15,000. The beginning balance of retained earnings on the statement of retained earnings for the year ended July 31, 2014 is
A) $500,000.
B) $565,000.
C) $550,000.
D) Cannot be determined from the information provided.

Question

Tantramar Corporation has the following shareholders equity on July 31, 2013: 
-Assume that during the following year the company had profit of $65,000 and declared and paid dividends of $15,000. The beginning balance of retained earnings on the statement of retained earnings for the year ended July 31, 2014 is
A) $500,000. 
B) $565,000. 
C) $550,000. 
D) Cannot be determined from the information provided.

Quizplus · Accepted Answer

The beginning balance of retained earnings is not affected by the profit or dividends of the current year. It is a carryover from the previous year's ending balance, so without information about adjustments or changes during the year, the beginning balance remains as initially stated.

Tantramar Corporation Has the Following Shareholders Equity on July 31