Question

The Andrews company currently has the following balances in their equity accounts: Common Stock $37,081 Retained earnings $120,358 Suppose next year the Andrews company generates $46,300 in Net Profit, and declares and pays $16,000 in Dividends. What will Andrews ending balance in Retained Earnings be next year?

Answer 1

Answer:

ending retained earnings:  150,658

Explanation:

$Beginning Retained Earnings +/- Net Income/Loss - Dividends Equals Ending Retained Earning$

beginning 120,358

+ 46,300 net profit

- 16,000 dividends

ending retained earnings:  150,658

The income, increase the amount of earning retained

the dividends are earnings that goes to the owners and leave the company, it decreasethe earning accumulated