Answered Essay: Bosque Corporation began operations on January 2, 2013 with an investment of $50. Net income for th

Bosque Corporation began operations on January 2, 2013 with an investment of $50. Net income for the first year of operations was $84 and the corporation paid out dividends of $45. What amount of Retained earnings will appear on Bosque Corporation’s December 31, 2013 balance sheet?

Expert Answer

 

Particulars Amount($)
Net income $84
Less:dividends ($45)
Ending retained balance $39.

The investment is not included in retained earnings balance but is included in the total capital structure of the company.

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