Panmar Inc.is preparing a statement of stockholders' equity for 2019.On January 1,2019,Panmar started the year with a $200,000 credit balance in its retained earnings account.During 2019,the company earned net income of $140,000.Panmar declared dividends of $80,000 and paid $50,000 of those dividends.Also,the company received cash of $100,000 for additional shares of common stock issued and then paid $30,000 to repurchase shares of common stock.What is the balance in retained earnings on December 31,2019?

A) $260,000.
B) $290,000.
C) $330,000.
D) $390,000.

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Melissa Marulanda · Accepted Answer

Final Answer : A, Explanation :  The balance in retained earnings on December 31, 2019, is calculated as follows: Starting retained earnings ($200,000) + Net income ($140,000) - Dividends declared ($80,000) = $260,000. The cash received for additional shares and the repurchase of shares affect other equity accounts, not retained earnings.

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