Question

At the beginning of the current year, Wilson Corporation had 130,000 shares of $1 par common stock outstanding and had retained earnings of $4,100,000. During the year, the company earned $1,605,000 and paid a year-end cash dividend of $4 per share. What was Wilson Corporation's retained earnings at the end of the year

Answer 1

Answer:

the ending retained earnings balance is $5,185,000

Explanation:

The computation of the ending retained earnings balance is shown below

Ending retained earnings = Beginning retained earnings + income earned - cash dividends

= $4,100,000 + 1,605,000 - (130,000 shares × $4)

= $4,100,000 + 1,605,000 - $520,000

= $5,185,000

hence, the ending retained earnings balance is $5,185,000

We simply applied the above formula so that the correct value could come

And, the same is to be considered