Use the following information to answer the next 2 questions

Use the following information to answer the next 2 questions: Aggie Consultants had the following balance sheet amounts at the beginning of 2017: Total Assets Common Stock Retained Earnings $400,000 50,000 100,000 During the year, total assets increased by $120,000 and total liabilities increased by s40,000. Owners invested an additional S20,000 in exchange for common stock and the company paid out $30,000 in dividends. No other transactions occurred except revenues, which totaled $220,000 for the year, and expenses. 7. Retained Earnings on December 31, 2017 is: loo,ood A $170,000 B. $200,000 C. $140,000 D. S190,000 E. $160,000 A S100,000 B. $120,000 C. $130,000 D. S150,000 E. $190,000 AR

Solution

7 Retained Earnings on Dec 31,2017 = 100000+(120000-40000-20000) = $160000 Option E is correct 8 Net income for the year = (160000-100000)+30000 = $90000 Expenses for the year = 220000-90000 = $130000 Option C is correct