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13 November, 22:17

At the end of 2013, retained earnings for the Bisk Company was $1,850. Revenue earned by the company in 2013 was $2,100, expenses paid during the period were $1,150, and dividends paid during the period were $550. Based on this information alone, retained earnings at the beginning of 2013 was

A. $4,200.

B. $900.

C. $1,450.

D. $2,250.

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  1. 13 November, 22:28
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    C. $1,450.

    Explanation:

    Retained Earnings at the end of 2013 = $1,850

    Net Income For the year = Revenue earned - Expenses

    Net Income For the year = $2,100 - $1,150

    Net Income For the year = $950

    Retained Earnings at the End of 2013 = Retained Earnings at the Beginning of 2013 + Net Income for the year - Dividend paid during year

    Retained Earnings at the Beginning of 2013 = Retained Earnings at the end of 2013 - Net Income for the year + Dividend paid during year

    Retained Earnings at the Beginning of 2013 = $1850 - $950 + $550

    Retained Earnings at the Beginning of 2013 = $1,450
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