Use the work sheet for Finley Company to answer the questions that follow.
The ending balance in Retained Earnings is
A) $28,000
B) $75,000
C) $25,000
D) $73,000

Question

Use the work sheet for Finley Company to answer the questions that follow. 
 The ending balance in Retained Earnings is
A) $28,000 
B) $75,000 
C) $25,000 
D) $73,000

Quizplus · Accepted Answer

The ending balance in Retained Earnings can be calculated by subtracting the beginning balance ($47,000) from the net income ($56,000) and adding any dividends paid ($42,000). Therefore, the ending balance in Retained Earnings is: 
$47,000 + $56,000 - $42,000 = $61,000. 
Option B is the closest answer, and it is likely that there is a minor rounding error in the calculation.

Use the Work Sheet for Finley Company to Answer the Questions