Efect of ncome on a fimm\'s balance sheet Coerad u n, reported net ncome of st 3

Question

Efect of ncome on a fimm's balance sheet Coerad u n, reported net ncome of st 3sa.000 tor the year ended December 31 2016 Show how Cowats balance sheet would a Conrad paed no duidernds during the yeaw and nvested the tunds in maketable secuies Conrat pand dvidends totaling 5495 000 and used the batance of the net income to retre O Data Tabi 51,058,000 $495,000 as didends to a If Conrad paid ne dvidends dunng the year and ievested tho funds n Conrad Ai, Inc. Balance Sheet $120 000 h. it Conrad The ending retaned arings willbRound to the nearest o C. if Conrat pais ntotig 5495,000 and nvested he balance of the ret income in uiing The ending buldngs i bRound to the rearet) The anding netanedi i beRound to the nearest or nwahe amnt anstered toe Liabltes and Stockhokders Equity $75.000 The ending setaned eanings w be sRound to the nearest doa Refaned eaming Enter your ancor in ach of the answer bos Total Sabes and equity

Explanation / Answer

Answer d.

Retained Earnings, December 31, 2015 = $1,579,000
Net Income = $1,358,000
Dividend = $1,358,000

Retained Earnings, December 31, 2016 = Retained Earnings, December 31, 2015 + Net Income – Dividend
Retained Earnings, December 31, 2016 = $1,579,000 + $1,358,000 - $1,358,000
Retained Earnings, December 31, 2016 = $1,579,000

The ending retained earnings will be $1,579,000

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