Use the following Balance Sheet and Income Statement to answer the question. What is the Retained earnings shown on the Balance Sheet for 2010?
A)$15,000
B)$45,000
C)$75,000
D)$77,000

Question

Use the following Balance Sheet and Income Statement to answer the question.   What is the Retained earnings shown on the Balance Sheet for 2010?
A)$15,000 
B)$45,000 
C)$75,000 
D)$77,000

Quizplus · Accepted Answer

Retained earnings for 2010 can be calculated as:
Retained earnings (2010) = Retained earnings (2009) + Net income (2010) - Dividends (2010)
= $30,000 + $60,000 - $45,000
= $45,000. Therefore, the correct answer is B) $45,000.

Use the Following Balance Sheet and Income Statement to Answer