A Company Had a Beginning Balance in Retained Earnings of $50,000.During

question 89

Multiple Choice

A company had a beginning balance in retained earnings of $50,000.During the year, the company earned net income of $85,000 and paid a $15,000 cash dividend.The company also declared a 2:1 stock split, which resulted in the issue of 10,000 new shares.At the time of the stock split, the shares were selling at a market price of $12.What is the balance in retained earnings at the end of the year?

• A)$0
• B)$70,000
• C)$120,000
• D)$135,000

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Definitions:

Balance Sheet

A financial statement that provides a snapshot of a company’s financial condition at a specific point in time, showing assets, liabilities, and shareholders’ equity.

Annual Depreciation

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to wear and tear.

Monthly Basis

A timeframe or schedule that involves events or payments occurring once every month.

Prepaid Expense

Expenses paid in advance for goods or services which will be received in the future.