Question
Given below is some summarized information taken from the adjusted trial balance of New Company at December 31, Year 2, the end of its second
Given below is some summarized information taken from the adjusted trial balance of New Company at December 31, Year 2, the end of its second year of operations.
| Debit | Credit |
Cash | 15,000 |
|
A/R | 6,000 |
|
Equipment (net) | 66,000 |
|
A/P |
| 31,000 |
Dividends Payable |
| 3,000 |
Common Stock ($3 par, 1,000 shares issued) |
| 3,000 |
APIC |
| 27,000 |
Treasury Stock (200 shares) | 8,000 |
|
Retained Earnings |
| 14,000 |
Revenues |
| 98,000 |
Expenses | 78,000 |
|
Dividends Declared | 3,000 | . |
Total | 176,000 | 176,000 |
The only treasury stock transaction was the purchase of 200 shares on November 15, Year 2.
New Company | |||
Statement of Retained Earnings | |||
For the Year Ended December 31, Year 2 | |||
|
|
|
|
| Line 1 | $ |
|
| Line 2 | 20,000 |
|
| Line 3 | . |
|
| Line 4 | $31,000 |
|
Which one of the following amounts should be reported on "Line #1" of Startup Company's "Statement of Retained Earnings"?
a. $14,000
b. $3,000
c. $30,000
d. $22,000
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