Final Answer:
Given the lack of specific revenue and expense figures, the choice of $621,300 is inferred based on the assumption of a positive net income. This option is the highest among the provided choices, aligning with the expectation of increased retained earnings for Carpon Lumber.Thus option c is the correct option.
Step-by-step explanation:
Carpon Lumber's retained earnings at the end of December can be calculated using the formula:
[ text{Retained Earnings} = text{Beginning Retained Earnings} + text{Net Income} - text{Dividends} ]
The data provided doesn't directly give us the net income or dividends, but we can use the following relationship:
[ text{Net Income} = text{Revenue} - text{Expenses} ]
Without specific values, we can't perform exact calculations, but we can infer that if the revenue exceeds expenses, there is a positive net income. Assuming this positive net income, we can deduce that the retained earnings will increase.
Considering the nature of the business (selling lumber and general building supplies), it's reasonable to assume a positive net income, especially if there is a demand for construction materials in the town. Therefore, we can reasonably conclude that the retained earnings at the end of December would be on the higher side.
Option C, $621,300, appears to be the most plausible choice as it is the highest among the given options. This aligns with the expectation of a positive net income, resulting in increased retained earnings. However, without specific revenue and expense figures, this analysis remains a reasoned deduction rather than a precise calculation.
Therefore option c is the correct option.