Golden Enterprises Started the Year with the Following: Assets $50,000;Liabilities

question 196

Multiple Choice

Golden Enterprises started the year with the following: Assets $50,000;Liabilities $15,000;Common Stock $30,000;Retained Earnings $5,000.During the year,the company earned revenue of $2,500,all of which was received in cash,and incurred expenses of $1,500,all of which were unpaid as of the end of the year.In addition,the company paid dividends of $500 to owners.Assume no other activities occurred during the year. The amount of Golden's retained earnings at the end of the year is:

• A)$7,500.
• B)$5,500.
• C)$6,000.
• D)$500.

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Definitions:

Direct Labor

The cost of wages for employees who directly manufacture products or provide services.

Factory Overhead Applied

The assignment of all indirect costs of manufacturing to the goods produced, including costs such as utilities and maintenance for the manufacturing plant.

Actual Costs

The exact expenses incurred during the production or execution of a project or operation.

Underapplied

A situation in cost accounting where the allocated indirect costs are less than the actual indirect costs incurred, resulting in a discrepancy.