Answer:
C.Retained earnings increased $33,900 during 2014.
Explanation:
Total expenses during the year=Revenue- net income
=77,500-33,900
=$43,600
Therefore, option A. is correct
Total Liabilities=Total assets-total equity
=217,000-123,000
=$94,000
Therefore, option B. is correct
The formula for calculating Retained earnings is given as follows:
Retained earnings at year end=Opening retained earnings+net income-dividend paid.
83,000=opening retained earnings+33,900-5,700
opening retained earnings=83,000-33,900+5,700
=54,800
Change in retained earnings=closing retained earnings-opening retained earnings
Change in retained earnings=83,000-54,800=28,200
Therefore, Option C. is not correct
Common stock at December 31, 2014=total equity-total retained earnings
=123,000-83,000
=$40,000
Therefore, Option D. is correct
Based on the above discussion the answer is C.Retained earnings increased $33,900 during 2014.
