Retained earnings at the beginning and ending of the accounting period were $1,000 and $2,100, respectively. Revenues of $3,900 and dividends paid to stockholders of $900 were reported during the period. What was the amount of expenses reported for the period?
A)$3,000.
B)$1,100.
C)$2,800.
D)$1,900.

Question

Quizplus · Accepted Answer

The change in retained earnings is calculated as: Ending Retained Earnings - Beginning Retained Earnings = Net Income - Dividends. So, $2,100 - $1,000 = Net Income - $900. Net Income = $2,000. Revenues - Expenses = Net Income, so $3,900 - Expenses = $2,000. Therefore, Expenses = $1,900.

Retained Earnings at the Beginning and Ending of the Accounting