Question

Return to questionItem 4 Required information Skip to question Retained earnings at the beginning of the period was $300. During the period, Kilgore Company earned revenue of $1,100 and incurred expenses of $400. Assuming dividends paid to stockholders were $200, the ending balance in retained earnings must have been:

Answer 1

Answer:

$800

Explanation:

The first task here is to determine the amount of net income recognized in the year which is the earned revenue minus incurred expenses as shown thus:

net income=earned revenue-incurred expenses

earned revenue= $1,100

incurred expenses=$400

net income=$1,100-$400=$700

retained earnings for the period=net income-dividends paid

dividends paid=$200

retained earnings for the period=$700-$200=$500

ending balance of retained earnings=beginning retained earnings+retained earnings for the period

beginning retained earnings=$300

ending balance of retained earnings=$300+$500=$800