Kilmer Corporation began the year with retained earnings of $930,000. During the year, the company issued $1,260,000 of common stock, recorded expenses of $3,600,000, and paid dividends of $240,000. If Kilmer's ending retained earnings was $990,000, what was the company's revenue for the year?
A)$3,660,000
B)$3,900,000
C)$4,920,000
D)$50,160,000

Question

Quizplus · Accepted Answer

To find the company's revenue, we use the formula for retained earnings: Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends. Plugging in the values: $990,000 = $930,000 + Net Income - $240,000. Solving for Net Income gives $300,000. Since Net Income = Revenue - Expenses, we have $300,000 = Revenue - $3,600,000. Therefore, Revenue = $3,900,000.

Kilmer Corporation Began the Year with Retained Earnings of $930,000