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 employees' salaries for April,$700.What was Sallisaw's retained earnings balance at the end of April?

Question

Quizplus · Accepted Answer

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

Assume That Sallisaw Sideboards,Inc