C Co Reported a Retained Earnings Balance of $200,000 at December

question 76

Multiple Choice

C Co. reported a retained earnings balance of $200,000 at December 31, 2017. In September 2018, C determined that insurance premiums of $30,000 for the three-year period beginning January 1, 2017, had been paid and fully expensed in 2017. C has a 30% income tax rate. What amount should C report as adjusted beginning retained earnings in its 2018 statement of retained earnings?

• A) $210,000.
• B) $214,000.
• C) $220,000.
• D) $221,000.

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Definitions:

Talbutal

A barbiturate derivative used as a sedative and hypnotic drug.

Paregoric

An opium tincture used historically to treat diarrhea by decreasing bowel movements and to alleviate pain with its sedative effects.

Schedule I

A category of controlled substances that have a high potential for abuse, no currently accepted medical use in the United States, and lack accepted safety for use under medical supervision.

Abuse Potential

The likelihood or risk that a substance, often a drug, can lead to dependency or addiction in users.