For Year 1, the Sacramento Corporation had beginning and ending Retained Earnings balances of $151,900 and $201,400 respectively. Also during Year 1, the corporation declared and paid cash dividends of $20,600 and issued stock dividends valued at $16,000. Total expenses were $37,416. Based on this information, what was the amount of total revenue for Year 1?

Question

Quizplus · Accepted Answer

The total revenue can be calculated using the formula for ending Retained Earnings: Beginning Retained Earnings + Net Income - Dividends = Ending Retained Earnings. Net Income is Revenue - Expenses. Rearranging for Revenue gives: Revenue = Expenses + Dividends + (Ending Retained Earnings - Beginning Retained Earnings). Substituting the given values: Revenue = $37,416 + ($20,600 + $16,000) + ($201,400 - $151,900) = $123,516.

For Year 1, the Sacramento Corporation Had Beginning and Ending