Answer:
c. $3,900
Explanation:
Net Income is calculated first because it is to be included in the calculation of Retained Earnings.
Net Income for the year is $1,000
The formula to calculate the Net Income is as follows :
Revenue - Expense
$3,200 - $2,200 = $1,000.
The formula to calculate Retained Earnings is as follows :
Total Assets - Total Liabilies + Net Income = Retained Earnings
($4,000+ $3,400 + $3,200) - ($2,000 + $3,900 + $1,800) + $1,000
($10,600) - (7,700) + $1,000 = $3,900.