1. OnJanuary1,20X6,ChengCo.beganoperatingitsshippingbusiness.Inthe20X6fiscal year, Cheng Co. reported sales of $9,500,000, cost of goods sold of $4,800,000 and other expenses of $2,100,000. The company is charged income taxes at a rate of 30%. During the 20X6 fiscal year, Cheng Co. had 1,250,000 shares outstanding and paid a dividend of $0.25 per share to its shareholders in March, July, and November.
2. What is the ending balance of retained earnings for Cheng Co. on December 31, 20X6?
3. a) $882,500 b) $1,662,500 c) $1,820,000 d) $2,757,500