Lorna Company is a new company with a beginning retained earnings balance of zero.It has the following account balances at the end of the first year of operations: What is the ending balance in Retained Earnings?
A)$22,000
B)$32,000
C)$30,000
D)$40,000

Question

Lorna Company is a new company with a beginning retained earnings balance of zero.It has the following account balances at the end of the first year of operations:  What is the ending balance in Retained Earnings?
A)$22,000 
B)$32,000 
C)$30,000 
D)$40,000

Quizplus · Accepted Answer

Beginning Retained Earnings $0 + Net Income $30,000 - Dividends $8,000 = $22,000
To calculate net income for above: Revenues $106,000 - Salaries Expense $14,000 - Utilities Expense $12,000 - Advertising Expense $10,000 = $30,000 Net Income

Lorna Company Is a New Company with a Beginning Retained