Capital stock 20,000 shares outstanding Revenues $500,000 Expenses $350,000 Cont
ID: 2453354 • Letter: C
Question
Capital stock
20,000 shares outstanding
Revenues
$500,000
Expenses
$350,000
Contributed Capital
$ 555,000
Retained earnings, beginning balance January 1, 2009
300,000
Total revenue earned during 2009
900,000
Total expenses incurred during 2009
810,000
Total cash collected during 2009
890,000
The 2009 closing entries would include a
A) $80,000 net credit to Retainedearnings.
B) $80,000 net debit to Retainedearnings.
C) $90,000 debit to Retainedearnings.
Capital stock
20,000 shares outstanding
Revenues
$500,000
Expenses
$350,000
Explanation / Answer
6. a) Income before taxes 120,000 - Taxes(30%) 36,000 Income aftertaxes 84,000 b.) Earnings per share Revenues 500,000 -Expenses 350,000 NetIncome 150,000 EPS = 150,000 / 20,000 = $ 7.50 / share c.) Profit Margin Net Income after taxes Revenues =596 / 18,158 = 3.2% d.) Choice D - 90,000 credit to retained earnings.
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