Warren Enterprises Had the Following Events During 2016

question 22

Multiple Choice

Warren Enterprises had the following events during 2016:
The business issued $40,000 of common stock to its stockholders.
The business purchased land for $24,000 cash.
Services were provided to customers for $32,000 cash.
Services were provided to customers for $10,000 on account.
The company borrowed $32,000 from the bank.
Operating expenses of $24,000 were incurred and paid in cash.
Salary expense of $1,600 was accrued.
A dividend of $8,000 was paid to the stockholders of Warren Enterprises.
Assuming the company began operations during 2016,the amount of retained earnings as of December 31,2016 would be:

• A)$10,000
• B)$8,400
• C)$16,400
• D)$42,000

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Definitions:

Regression

In statistics, the act of estimating the relationship between variables, allowing for the prediction of one variable based on the value of another.

Residuals

The differences between observed values and the values predicted by a model, indicating the discrepancy in data fit.

Scatterplots

Graphical representations that use Cartesian coordinates to display values for typically two variables for a set of data.

Linear Model

A statistical model that assumes a linear relationship between the input variables and the single output variable.