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27 August, 17:38

The first year of operations for a company was Year 1. The net income for Year 1 was $21,100 and dividends of $12,550 were paid. In Year 2, the company reported net income of $35,100 and paid dividends of $5,550. At the end of Year 1, the company had total assets of $161,000. At the end of Year 2, the company had total assets of $ $251,000. What was the amount of retained earnings at the end of Year 1?

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  1. 27 August, 17:41
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    Amount of retained earnings at the end of Year 1 was $8,550

    Step-by-step explanation:

    In Year 1

    net income = $21,100

    dividends = $12,550

    In Year 2

    Net income = $35,100

    Paid dividends = $5,550

    At the end of Year 1, the company had total assets of $161,000

    At the end of Year 2, the company had total assets of $ $251,000

    Retained Earning at the end of Year 1 = Opening balance + Net Income - Dividend paid

    Retained Earning at the end of Year 1 = 0 + 21,100 - 12,550 = 8550
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