The income statement for the month of June, 2014 of Taylor Enterprises contains the following information: At June 1, 2014, Taylor reported Retained Earnings of ₤35,000. The company paid no dividends during June. At June 30, 2014, the company will report Retained Earnings of

Question

The income statement for the month of June, 2014 of Taylor Enterprises contains the following information:  At June 1, 2014, Taylor reported Retained Earnings of ₤35,000. The company paid no dividends during June. At June 30, 2014, the company will report Retained Earnings of

Quizplus · Accepted Answer

Since Taylor Enterprises paid no dividends during June, its net income for the month increased the amount of Retained Earnings. 
Retained Earnings (end of June) = Retained Earnings (beginning of June) + Net income for June 
Retained Earnings (end of June) = ₤35,000 + ₤3,900 = ₤38,900 
Therefore, option C is the correct answer.

The Income Statement for the Month of June, 2014 of Taylor