Question

At the end of 2013, retained earnings for the Bisk Company was $1,850. Revenue earned by the company in 2013 was $2,100, expenses paid during the period were $1,150, and dividends paid during the period were $550. Based on this information alone, retained earnings at the beginning of 2013 was

A. $4,200.
B. $900.
C. $1,450.
D. $2,250.

Answer 1

Answer:

C. $1,450.

Explanation:

Retained Earnings at the end of 2013 = $1,850

Net Income For the year = Revenue earned - Expenses

Net Income For the year = $2,100 - $1,150

Net Income For the year = $950

Retained Earnings at the End of 2013 = Retained Earnings at the Beginning of 2013 + Net Income for the year - Dividend paid during year

Retained Earnings at the Beginning of 2013 = Retained Earnings at the end of 2013 - Net Income for the year + Dividend paid during year

Retained Earnings at the Beginning of 2013 = $1850 - $950 +$550

Retained Earnings at the Beginning of 2013 = $1,450