Accounting: Tools for Business Decision Making, 5th Edition

by Kimmel, Paul D.; Weygandt, Jerry J.; Kieso, Donald E.

Published by Wiley

ISBN 10: 1118128168

ISBN 13: 978-1-11812-816-9

Chapter 2 - A Further Look at Financial Statements - Problems - Set B - Page 86: P2-2B

Answer

This concept is highly likely to be tested in examinations. Make sure to understand the mechanics of preparing retained earning statement i.e., opening balance add profit less dividends.

Work Step by Step

Net income = 6,500 + 14000 (opening bal. RE) - 3600 (dividends) = 16,900 RE closing balance

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