Question

At September 1, 2022, Sunland Company reported Retained Earnings of $406080. During the month, Sunland generated revenues of $57600, incurred expenses of $34560, purchased equipment for $14400 and paid dividends of $5760. What is the balance in Retained Earnings at September 30, 2022

Answer 1

$423,360

Step-by-step explanation:

Equity which represents the amount owed to the owners of the business includes retained earnings (which is the accumulation of the net income/loss over the years less dividends paid) and common shares.

Ending retained earnings = Beginning retained earnings + additional stock issued + net income - dividend paid

net income is the difference between sales and expenses

= $406080 + $57600 - $34560 - $5760

= $423,360