Moore Industries began operations on January 2, 2016, with an investment of $50,000 by each of its two stockholders.Net income for its first year of business was $240,000.Moore Industries paid a total of $100,000 in dividends to its stockholders during the year.

-Read the information about Moore Industries.What is the company's retained earnings balance at December 31, 2016?
A) $140,000
B) $190,000
C) $240,000
D) $340,000

Question

Moore Industries began operations on January 2, 2016, with an investment of $50,000 by each of its two stockholders.Net income for its first year of business was $240,000.Moore Industries paid a total of $100,000 in dividends to its stockholders during the year.
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-Read the information about Moore Industries.What is the company's retained earnings balance at December 31, 2016?
A) $140,000
B) $190,000
C) $240,000
D) $340,000

Quizplus · Accepted Answer

Retained earnings at the end of the year equals the net income minus dividends paid. Therefore, $240,000 (net income) - $100,000 (dividends) = $140,000.

Moore Industries Began Operations on January 2, 2016, with an Investment