TriCycle, Corp

question 85

Multiple Choice

TriCycle, Corp. began the year 2018 with $25 million in retained earnings. The firm earned net income of $7 million in 2018 and paid $1 million to its preferred stockholders and $3 million to its common stockholders. What is the year-end 2018 balance in retained earnings for TriCycle?

• A) $25 million
• B) $28 million
• C) $32 million
• D) $36 million

---

Definitions:

First-in, First-out Method

An inventory valuation method assuming that the first goods purchased are the first goods sold, usually used to calculate cost of goods sold.

Conversion Costs

The total cost of converting raw materials into finished goods, including both direct labor and manufacturing overhead.

Work in Process

Inventory that is in the production process and is not yet completed.

Equivalent Units

Equivalent units are a concept used in cost accounting to express the amount of work done on partially finished goods in terms of fully completed units.