Calculating Ending Retained Earnings

Easy Financial Statements Statement Of Changes In Equity

When preparing the Statement of Changes in Equity, a company aggregates various components affecting its equity over a specific period. This statement typically includes transactions such as new share issuance, dividends paid, and changes in retained earnings.

XYZ Ltd reported the following information for the financial year ending December 31, 2022:

Beginning Retained Earnings: $100,000
Net Income for the Year: $30,000
Dividends Paid: $5,000

Based on this information, how would the ending retained earnings be calculated for the year?

Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends Paid

Ending Retained Earnings = Beginning Retained Earnings - Net Income + Dividends Paid

Ending Retained Earnings = Net Income + Dividends Paid

Hint

Submitted5.9K

Correct5.0K

% Correct85%