Nelson Company experienced the following transactions during Year 1, its first year in operation.Issued $12,000 of common stock to stockholders.Provided $4,600 of services on account.Paid $3,200 cash for operating expenses.Collected $3,800 of cash from accounts receivable.Paid a $200 cash dividend to stockholders. What is the amount of retained earnings that will be shown on the company's balance sheet prepared as of December 31, Year 1?
A) $1,200
B) $1,000
C) $1,400
D) $13,200

Question

Quizplus · Accepted Answer

Retained earnings = $12,000 (common stock) + $4,600 (services on account) - $3,200 (operating expenses) - $3,800 (accounts receivable) - $200 (cash dividend) = $1,200

Nelson Company Experienced the Following Transactions During Year 1, Its