Calculation of total change in retained earnings during the year:
Total change in retained earnings during the year can be calculated using the following formula:
Total change in retained earnings during the year = Revenues Earned during the year – Expenses incurred during the year – Dividends declared during the year
= 245000-120000-40000
= 85,000
Hence, total change in retained earnings during the year is $85,000
Answer:
$85,000
Explanation:
Retained earning (R) is the net income of a business after expenses and dividing the corresponding money to the shareholders, normally the retained earning is calculated annually, we can use the retained earning formula to find R as follow: R = Net Income - Expenses - Declared dividends = $245,000 - $120,000 - $40,000 = $85,000
