Atlantic Corporation reported the following amounts at the end of the first year of operations: common stock $200,000; sales revenue $800,000; total assets $600,000; dividends declared $40,000; and total liabilities $320,000. What are Atlantics' retained earnings at the end of the year and what amount of expenses were incurred during the year?

Question

Quizplus · Accepted Answer

Retained earnings = Net income - DividendsNet income = Sales revenue - ExpensesSales revenue = $800,000Dividends = $40,000Total assets = $600,000Total liabilities = $320,000Shareholders' equity = Total assets - Total liabilities = $600,000 - $320,000 = $280,000Common stock = $200,000Retained earnings = Shareholders' equity - Common stock = $280,000 - $200,000 = $80,000Expenses = Sales revenue - Net income = $800,000 - $80,000 = $720,000

Atlantic Corporation Reported the Following Amounts at the End of the First