Question

Corporation began with retained earnings of million. Revenues during the year were ​million, and expenses totaled million. declared dividends of million. What was the​ company's ending balance of retained​ earnings? To answer this​ question, prepare ​'s statement of retained earnings for the year ended December​ 31, ​, complete with its proper heading.

Answer 1

Complete Question:

Cell One Corporation began 2018 with retained earnings of $ 260 million. Revenues during the year were $ 520 ​million, and expenses totaled $ 340 million. Cell One declared dividends of $ 61 million. What was the​ company's ending balance of retained​ earnings? To answer this​ question, prepare Cell One​'s statement of retained earnings for the year ended December​ 31, 2018​, complete with its proper heading.

Answer:

Cell Corporation

Statement of Retained Earnings for the year ended December 31, 2018:

                                                      $'million

Retained Earnings, Dec. 31, 2017   260

Net Income                                       180

Dividends                                          (61)

Retained Earnings, Dec. 31, 2018   379

Explanation:

a) Data and Calculations:

Beginning Retained Earnings = $260 million

Revenues during the year were $ 520 ​million

Expenses totaled                          $ 340 million

Net Income (Revenue - Expenses) $180 million

Cell One declared dividends of $ 61 million

b) Cell Corporation's Retained Earnings for the year ended December 31, 2018 is the difference between the beginning retained earnings, net income, and the amount of dividend declared during the current year.  This figure gives the amount of equity that has been retained for growing the business, which is an important internal source of corporate funding.