A Level Accounting (9706)•9706/12/O/N/20
Explanation
Retained Earnings Calculation
Steps:
- Retained earnings = Beginning retained earnings + Net income - Dividends.
- Identify beginning retained earnings from prior year-end balance.
- Add net income for 2019 from income statement.
- Subtract dividends declared and paid in 2019.
Why D is correct:
- 50,000 + net income 11,000 = $69,000, per accounting standards.
Why the others are wrong:
- A omits net income addition.
- B subtracts dividends twice.
- C ignores dividend deduction.
Not enough information.
Final answer: D
Topic: Preparation of financial statements
Practice more A Level Accounting (9706) questions on mMCQ.me