It is Dives,Inc.'s first year of business.Dives' net income for its first year is $200,000.Dives declared and paid dividends of $50,000.The balance in retained earnings at the end of the first year equals:
A)$200,000.
B)$50,000.
C)$150,000.
D)$250,000.

Question

Quizplus · Accepted Answer

Retained earnings equals net income minus dividends paid, so $200,000 - $50,000 = $150,000. Therefore, the balance in retained earnings at the end of the first year is $150,000.

It Is Dives,Inc