Question

The balance sheet of the Algonquin Company reported assets of $50,000, liabilities of $22,000 and common stock of $15,000. Based on this information only, the amount or balance for retained earnings must be:

Answer 1

$ 13.000

Step-by-step explanation:

The accounting equation states that :

Total Assets = Total Liabilities + Equity

To accomplish this equation is needed a total value of retained earnings of $13.000 , in this manner you have the equation complete:

$50.000 = Liab. ($22.000) + Equity ($15.000 +$13.000)

Retained earnings is a component of the Equity next to common stock.