On January 1, 20B, Grover Inc

question 44

Multiple Choice

On January 1, 20B, Grover Inc., started the year with a $22,000 credit balance in its retained earnings account. During 20B, the company earned profit of $40,000 and declared and paid dividends of $10,000. Also, the company received cash of $15,000 as an additional investment by its owners. Therefore, the balance in retained earnings on December 31, 20B, would be which of the following?

• A) $67,000.
• B) $57,000.
• C) $52,000.
• D) $42,000.

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Definitions:

Debit

An accounting entry that represents either an increase in assets or expenses or a decrease in liabilities, equity, or revenue.

Capital Balances

The amount of money that partners or owners have invested in the business.

Profits and Losses

Financial results of a company's operations, with profits indicating net income and losses indicating net expenses exceeding revenues.

Admitted

The term is commonly used in insurance, indicating an insurer is licensed to operate in a particular state. Otherwise, NO.