On January 1, 2019, Les Holt invested $900,000 to start Holt Corporation. During the year, Holt Corporation had total revenues of $180,000 and total expenses of $48,000. Cash dividends paid totaled $36,000.
What must have been the balance in Holt Corporation's total assets at the end of the year, assuming no liabilities?

Question

Quizplus · Accepted Answer

Ending retained earnings = Beginning retained earnings - Dividends + Net income
X = ($0 - $36,000 + ($180,000 - $48,000))
X = $96,000
Assets = Liabilities + Retained earnings + Contributed capital
Y = $0 + $96,000 + $900,000
Y = $996,000

On January 1, 2019, Les Holt Invested $900,000 to Start