Answer:
B. $2,800
Explanation:
Retained earnings is the net profit that is left after deducting dividend. This can be calculated as follows:
Step 1: Calculation of total revenue
Total revenue = Services provided to customers for cash + Services provided to customers on account
Total revenue = $30,000 + $19,000 = $49,000
Step 2: Calculation of total expenses
Total expenses = Operating expenses incurred and paid in cash + Accrued salary expense
Total expenses = $26,000 + $2,200 = $28,200
Step 3: Calculation of net profit
Net profit = Total revenue – total expenses
Net profit = $49,000 - $28,200 = $20,800
Step 4: Calculation of retained profit
Retained profit = Net profit – Dividend
Retained profit = $20,800 - $18,000 = $2,800
Therefore, the correct option is B. $2,800.
