Table of contents

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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

If a company has beginning retained earnings of $1, net income of $5, and declares dividends of $2 during the year, what will be the ending retained earnings?

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Verified step by step guidance

Step 1: Understand the formula for calculating ending retained earnings. The formula is: Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends.

Step 2: Identify the values provided in the problem. Beginning Retained Earnings = $1, Net Income = $5, Dividends = $2.

Step 3: Substitute the values into the formula. Using MathML, the formula becomes:

Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends

Step 4: Perform the addition and subtraction operations step by step. First, add Beginning Retained Earnings ($1) and Net Income ($5), then subtract Dividends ($2).

Step 5: The result of the calculation will give you the Ending Retained Earnings. Ensure all operations are performed correctly to arrive at the final value.