1. Retained earnings at the end of year 1= $80
2a. lAt the end of year 2 the company reports net income of $120. It includes dividend declared for that year amounting to $30.
2b. During the year 2, company declared dividend amounting to $30.
2c. Retained earnings at the end of the year 2 =
Net income after dividend transferred to retained earnings in year 2 + Net income after dividend transferred to reatined earnings in year 1
= 90+80
=170
2d. It includes net income after dividend during the years 1 and 2 ( i.e 80+90)
3a. Net income for the year 3 = $150
3b. Dividend declared in year 3 = $40
3c. The ending balance of retained earnings at the end of year 3 =
sum of net income after dividend during the years 1,2 and 3
=80+90+110
=280
3d. The ending balance of retained earnings at the end of year 3 includes the net income after dividend during the years 1,2 and 3.
Net Income, Dividends, and Retained Earnings $300 $250 110 $200 $150 90 90 $100 150 120...
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2a) chosse one:
- revenue minus Expense in Year 2 only or
- revenue minus Expense in Year 1 only
2c) what is the ending balance of Retained Endings in Year
2?
3c) what is the ending balance of Retained Earnings in Year
3?
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