Warren Enterprises had the following events during Year 1 The business issued $3

Question

Warren Enterprises had the following events during Year 1 The business issued $34,000 of common stock to its stockholders The business purchased land for $26,000 cash Services were provided to customers for $30,000 cash. Services were provided to customers for $19,000 on account The company borrowed $30,000 from the bank Operating expenses of $26,000 were incurred and paid in cash. Salary expense of $2 200 was accrued. A dividend of $18,000 was paid to the stockholders of Warren Enterprises. Assuming the company began operations during Year 1, the amount of retained earnings as of December 31, Year 1 would be Multiple Choice $2.600 $2.800 $34,800 $49.000

Explanation / Answer

Calculate retained earnings :

so answer is b) $2800

2) Calculate retained earnings :

Net income = 21750+1800-12300-3450-900 = 6900

Retained earnings = 16800+6900-2700 = 21000

so answer is c) $21000

Service revenue (30000+19000) 49000 Less: Operating expense (26000) Less: Salary expense (2200) Net income 20800 Less: Dividend (18000) Retained earnings 2800

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.