Golden Enterprises started the year with the following: Assets $50,000;Liabilities $15,000;Common Stock $30,000;Retained Earnings $5,000.During the year,the company earned revenue of $2,500,all of which was received in cash,and incurred expenses of $1,500,all of which were unpaid as of the end of the year.In addition,the company paid dividends of $500 to owners.Assume no other activities occurred during the year. The amount of Golden's retained earnings at the end of the year is:

Question

Quizplus · Accepted Answer

Net Income = Revenue − Expenses
= $2,500 − $1,500 = $1,000
Ending retained earnings = Beginning retained earnings + Net income − Dividends
= $5,000 + $1,000 − $500 = $5,500

Golden Enterprises Started the Year with the Following: Assets $50,000;Liabilities