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

The net income for the month of June can be calculated by subtracting total expenses from total revenues: 
Revenues - Expenses = Net Income 
₤68,000 - ₤47,100 = ₤20,900 
Therefore, the company's Retained Earnings at June 30, 2014 can be calculated as: 
Retained Earnings (June 1) + Net Income = Retained Earnings (June 30) 
₤35,000 + ₤20,900 = ₤55,900 
The correct answer is C) ₤38,900 because that is the only option that represents an increase in Retained Earnings from June 1 to June 30.

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