David Bash\'s Landscaping Company has compiled the following list of account bal
ID: 2394936 • Letter: D
Question
David Bash's Landscaping Company has compiled the following list of account balances of various assets, liabilities, revenues and expenses on December 31, 2016, the end of its first year of operations.
Common stock
$50,400
Accounts payable
10,000
Salary expense
18,000
Repairs expense
3,200
Dividends
20,000
Truck
34,000
Equipment
25,200
Notes payable
32,800
Cash
70,400
Supplies expense
6,400
Service revenue
87,200
Gasoline expense
3,200
The retained earnings for David Bash’s Landscaping on December 31, 2016 are:
Select one:
A. $12,600
B. $56,400
C. $36,400
D. $ 2,800
Common stock
$50,400
Accounts payable
10,000
Salary expense
18,000
Repairs expense
3,200
Dividends
20,000
Truck
34,000
Equipment
25,200
Notes payable
32,800
Cash
70,400
Supplies expense
6,400
Service revenue
87,200
Gasoline expense
3,200
Explanation / Answer
The answer is "C. $36,400"
The retained earnings for David Bash's Landscaping on December 31,2016 = Net income - dividend = (87,200 - 3,200 - 6,400 - 3,200 - 18,000) - 20,000 = $36,400
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