Las Palmas Company Reported the Following Items on Its Financial

question 61

Multiple Choice

Las Palmas Company reported the following items on its financial statements for the year ending December 31, 2016: ? $$\begin{array} { l r l r } \text { Sales } & \$ 560,000 & \text { Cost of goods sold } & \$ 400,000 \\\text { Salary expense } & 40,000 & \text { Interest expense } & 30,000 \\\text { Dividends } & 30,000 & \text { Income tax expense } & 25,000\end{array}$$ ?
How much will be reported as retained earnings on Las Palmas' balance sheet at December 31, 2016, if this is the first year of operations?

• A) $ 45,000
• B) $ 35,000
• C) $ 85,000
• D) Not enough information is provided.