Respuesta :
Answer:
$23000.
Explanation:
Given:
ABC had a net income of $8,000, $5,000, $12,000, and $10,000 over the first four years of the company's existence.
The average annual amount of dividends paid over the last four years is $3,000.
Question asked:
What is the ending retained earnings balance?
Solution:
First of all we will calculate total dividends paid during four years:-
Average annual amount of dividends = $3,000
Total number of years = 4
As we know:
[tex]Average =\frac{Sum \ of\ observations}{Number\ of\ observation}[/tex]
[tex]3000=\frac{Sum\ of\ observations}{4} \\[/tex]
Multiplying both sides by 4
[tex]3000\times4=\frac{Sum\ of\ observations}{4} \times4\\ \\ 12000=Sum\ of\ observations[/tex]
That means, ABC paid $12,000 dividends over the last four years.
Now, Net income = 8000 + 5000 + 12000 + 10000 = $35000
Ending retained earnings balance = Net income - Dividend paid
= $35000 - $12,000
= $23000
Therefore, the ending retained earnings balance of ABC is $23000.
