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, $3,000.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, $900.What was Sallisaw's retained earning balance at the end of April?a. $11,400b. $12,200c. $16,400d. Some other amount

Answer 1

retained earning balance = $12,200

correct option is b. $12,200

Step-by-step explanation:

given data

retained earnings balance = $10,000

common stock = $5,000

Provided services on account = $3,000

Provided services in exchange for cash = $900

Purchased equipment and paid cash= $4,300

Paid rent = $800

Paid workers salaries = $900

solution

we know sale is here

Sales = 3000 + 900 = 3900

Expenses = 800 + 900 = 1700

So that sales less expenses is profit of 3900 - 1700 = $2200

so retained earning balance = $10,000 + $2200

retained earning balance = $12,200

correct option is b. $12,200