Question

At January 1, 2017, Troyer Industries reported Retained Earnings of $350,000. During 2 2017, Troyer had a net loss of $75,000 and paid dividends to the stockholders of $50,000. At December 31, 2017, the balance in Retained Earnings is:_____________
A) $ 275,000 debit
B) $ 225,000 credit
C) $ 350,000 debit
D) $ 300,000 credit During

Answer 1

Answer:

$225,000 credit

Explanation:

The formula for calculating ending retained is as follows

Ending retained earnings = beginning retained earning + current earnings - dividends paid out.

for Troyer industries  

Beginning retained earning $350,000

Current earnings : -75,000

Dividends : $50,000

Ending retained earnings = 350,000+(-75,000- $50 ,000)

=$350,000 - $125,000

=$225,000

Ending retained earning are $225,000 credit