Winton enterprises had the following events during 2007 : -issued 10,000 of comm

Question

Winton enterprises had the following events during 2007:

-issued 10,000 of common stock to stockholders

-purchased land for 6,000 cash

-services were provided to customers for 8,000 cash

-services were provided to customera for 5,000 on account

-company borrowed 8,000 from bank

-operating expenses of 6,000 were incurred and paid in cash

-interest of 500 was accrued on the bank loan

-a dividend of 2,000 was paid to the owners of Winton Enterprise

Assuming the company began operations in 2007, calculate the amount of retained earnings as of 12/31/2007

--The correct answer provided is 4,500. Please provide steps and explinations on how to calculate this number

Explanation / Answer

Income statement revenue from services 8000+5000 13000 less expenses 6500 operating expenses 6000 interest 500 Net income 6500 dividend paid 2000 amount of retained earnings 4500

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