Atlantic Corporation reported the following amounts at the end of the first year
ID: 2486047 • Letter: A
Question
Atlantic Corporation reported the following amounts at the end of the first year of operations: common stock $150,000; sales revenue $820,000; total assets $620,000; dividends declared $53,000; and topi liabilities $385,000. What are Atlanncs' retained earnings at the end of the year and what amount of expenses were incurred during the year? Retained earnings are $235,000 and expenses incurred totaled $585,000. Retained earnings are $85,000 and expenses incurred totaled $735,000. Retained earnings are $235,000 and expenses incurred totaled $385,000. Retained earnings are $85,000 and expenses incurred totaled $682,Explanation / Answer
Retained earnings are $85,000 and expenses incurred totaled $682,000
Working note:
Total Assets = Total Liabilities + Equity
$620,000 = $385,000 + Equity
Equity = $ 235,000
Retained earnings = $235,000 - $150,000 = $85,000
Profit = Retained earnings + Dividend
profit = $85,000 + $53,000 =$138,000
Expenses = sales - profit
expenses = $820,000 - $138,000 =$682,000
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