Calculate Retained Earnings Balance as of December 31, 2023

Question:

Based on the given data, how can we calculate the Retained Earnings balance as of December 31, 2023?

Answer:

The Retained Earnings balance as of December 31, 2023, is $393,600.

Explanation:

Retained earnings can be calculated by adding the net income for the period and subtracting the dividends declared and paid out during that period, along with any adjustments related to other changes.

Given:
Retained Earnings, December 31, 2022 = $346,800
Net Income for the year ended December 31, 2023 = $56,200
Dividends declared and paid in 2023 = $32,700

To find Retained Earnings as of December 31, 2023:
1. Start with the Retained Earnings balance as of December 31, 2022: $346,800
2. Add the net income for the year 2023: $56,200
3. Subtract the dividends declared and paid in 2023: $32,700

\[ \text{Retained Earnings, Dec 31, 2023} = \text{Retained Earnings, Dec 31, 2022} + \text{Net Income 2023} - \text{Dividends 2023} \] \[ \text{Retained Earnings, Dec 31, 2023} = 346,800 + 56,200 - 32,700 = 370,300 \] Therefore, the Retained Earnings balance as of December 31, 2023, is $370,300.
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