Warren Enterprises Began Operations During Year 1

question 34

Multiple Choice

Warren Enterprises began operations during Year 1. The company had the following events during Year 1: The business issued $38,000 of common stock to its stockholders.The business purchased land for $30,000 cash.Services were provided to customers for $34,000 cash.Services were provided to customers for $23,000 on account.The company borrowed $34,000 from the bank.Operating expenses of $30,000 were incurred and paid in cash.Salary expense of $2,600 was accrued.A dividend of $22,000 was paid to the stockholders of Warren Enterprises.
What is the balance of the Retained Earnings account as of December 31, Year 1?

• A)$57,000
• B)$2,400
• C)$24,400
• D)$23,000

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Definitions:

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost of those materials.

Direct Materials Quantity Variance

The variance between the real amount of materials consumed in production and the anticipated standard amount, multiplied by the cost per unit according to standards.

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services in a manufacturing process.

Variance Reports

Financial analyses that compare actual performance against planned or budgeted performance.