Question

10 points Print Item 3 As of December 31, Year 2, Moss Company had total cash of $147,000, notes payable of $84,700, and common stock of $51,500. During Year 3, Moss earned $27,000 of cash revenue, paid $15,500 for cash expenses, and paid a $2,100 cash dividend to the stockholders. Required a. Determine the amount of retained earnings as of December 31, Year 2. b.

Answer 1

the retained earning for the year 2 is $10,800

Step-by-step explanation:

The computation of the retained earning as on year 2 is shown below:

= Cash - note payable - common stock

= $147,000 - $84,700 - $51,500

= $10,800

We simply deduct the note payable and the common stock from the cash so that the retained earning for the year 2 could come

hence, the retained earning for the year 2 is $10,800