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21 September, 16:15

Lori Corporation reported the following information for the year ended December 31, 2017:

Net income Dividends Retained earnings at December 31, 2017 10,000 6,000 25,000

What was the balance of Lori' retained earnings at January 1, 2017?

a. $21,000

b. $29,000

c. $35,000

d. $31,000

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Answers (1)
  1. 21 September, 16:23
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    a. $21,000

    Explanation:

    Opening retained earnings + net income - Dividend paid = closing retained earnings

    Opening retained earnings = ?

    Net income = $10,000

    Dividend paid = $6,000

    Closing retained = $25,000

    Opening retained earnings + 10,000 - 6,000 = 25,000

    Opening retained earnings = 25000 - 4000

    = $21,000
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