Answer:
The amount of the company’s ending retained earnings is $190,000
Explanation:
Ending balance in retained earnings is calculated by using following formula:
Ending balance in retained earnings = Beginning balance in retained earnings + Net income - Cash dividends - Stock dividends
Carmen, Inc. started the year with $100,000 of retained earnings. The company had $125,000 of net operating income and declared $35,000 of dividends.
Ending balance in retained earnings = $100,000 + $125,000 - $35,000 = $190,000
