In Year 1 of its existence, Z-Kola Company provided $100,000 of services to customers on account, and incurred $65,000 of expenses also on account. By year-end of Year 1, Z-Kola had collected $86,000 from its customer. It also had paid (in cash) bills for its expenses in the amount of $62,000. Feeling good about the Company's performance for the year, the Board of Directors declared and paid to shareholders a dividend totaling $7,000.

After the accounting records are closed, what is the amount of retaining earnings at the end of Year 1?

Select one:

a. $31,000

b. $28,000

c. ($3,000)

d. $17,000