Assume that Sallisaw Sideboards,Inc.had a retained earnings balance of $10,000 on April 1,and that the company had the following transactions during April.
Issued common stock for cash,$5,000.
Provided services to customers on account,$2,000.
Provided services to customers in exchange for cash,$900.
Purchased equipment and paid cash,$4,300.
Paid April rent,$800.
Paid workers salaries for April,$700.
What was Sallisaw's retained earnings balance at the end of April?

Question

Assume that Sallisaw Sideboards,Inc.had a retained earnings balance of $10,000 on April 1,and that the company had the following transactions during April.
 Issued common stock for cash,$5,000.
Provided services to customers on account,$2,000.
Provided services to customers in exchange for cash,$900.
Purchased equipment and paid cash,$4,300.
Paid April rent,$800.
Paid workers salaries for April,$700.
What was Sallisaw's retained earnings balance at the end of April?

Quizplus · Accepted Answer

The retained earnings balance is calculated by adding net income to the beginning retained earnings. Net income is calculated as revenues minus expenses. Revenues from services are $2,000 (on account) + $900 (cash) = $2,900. Expenses are $800 (rent) + $700 (salaries) = $1,500. Net income is $2,900 - $1,500 = $1,400. Adding this to the beginning retained earnings of $10,000 gives $11,400.

Assume That Sallisaw Sideboards,Inc