Question

Retained earnings at the beginning and ending of the accounting period were $650 and $1,400, respectively. Revenues of $2,500 and dividends paid to stockholders of $550 were reported during the period. What was the amount of expenses reported for the period?

Answer 1

Answer:

The amount of expenses reported for the period is $1,200

Explanation:

For computing the amount of expense, we have to apply the formula which is shown below:

Ending retained earning balance = Beginning retained earning balance + revenues earned - cash dividend paid - expenses incurred

$1,400 = $650 + $2,500 - $550 - expenses incurred

$1,400 = $2,600 - expenses incurred

So, the expenses incurred would be

= $2,600 - $1,400

= $1,200