Woodlawn Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year $233,000
Cash dividends declared for the year $50,000
Proceeds from the sale of equipment $85,000
Gain on the sale of equipment $4,500
Cash dividends payable at the beginning of the year $22,000
Cash dividends payable at the end of the year $30,000
Net income for the year $110,000
The ending balance in retained earnings is:

A) $343,000.
B) $213,000.
C) $293,000.
D) $297,500.
E) $301,000.

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Panatula krishna teja · Accepted Answer

Final Answer : C, Explanation :  The ending balance in retained earnings is calculated by starting with the beginning balance, adding net income, and subtracting dividends declared. Beginning retained earnings ($233,000) + Net income ($110,000) - Dividends declared ($50,000) = Ending retained earnings ($293,000). Cash dividends payable and proceeds from the sale of equipment, including the gain on sale, do not affect the retained earnings calculation directly.

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