Question

Over the course of 2018​, the first year of​ operations, Medical ​Supplies, Inc. had the following income​ transactions: Sales Revenue of $ 4 comma 340 comma 000​; Cost of Goods Sold of $ 1 comma 936 comma 000​; Wage Expense of $ 876 comma 000​; Insurance Expense of $ 324 comma 000​; Administrative Expense of $ 414 comma 000​; Utilities Expense of $ 192 comma 000​; and Selling Expense of $ 42 comma 000. At the end of 2018​, the company declared and paid dividends in the amount of $ 62 comma 000. What is the ending balance in the retained earnings account at​ year-end?

Answer 1

Answer:

Ending RE at year-end:  494,000

Explanation:

As this is the first-year of operation there is no beginning Retained Earnings.

Sales Revenue of         4,340,000

Cost of Goods Sold     (1,936,000)

Wage Expense               (876,000)

Insurance Expense        (324,000)​

Administrative Expense (414,000​)

Utilities Expense            (192,000​)

Selling Expense             (42,000)  

         Net Income          556,000

Dividends paid:               (62,000)

Ending RE                       494,000