Answer:
balance of retained earnings = $3500
Explanation:
given data
net income year 1 = $1,000
net income year 2 = $2,000
net income year 3 = $3,000
pays dividends year 1 = $500
pays dividends year 2 = $1000
pays dividends year 3 = $1000
solution
we get here balance of retained earnings at end of 3rd year will be as
balance of retained earnings = Beginning Retained Earnings + net income - dividend ..........................1
put here value we get
balance of retained earnings = 0 + ($1,000 + $2,000 + $3,000) + ($500 + $1,000 + $1,000)
balance of retained earnings = $3500
