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6 April, 07:32

Gilkey Corporation began the year with retained earnings of $465,000. During the year, the company issued $630,000 of common stock, recorded expenses of $1,800,000, and paid dividends of $120,000. If Gilkey's ending retained earnings was $495,000, what was the company's revenue for the year?

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  1. 6 April, 07:55
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    The company's revenue for the year is $1,950,000

    Explanation:

    In this question, we apply the retained earning equation which is shown below:

    Ending retained earning balance = Beginning retained earning balance + net income - dividend paid

    $495,000 = $465,000 + net income - $120,000

    So, the net income = $150,000

    Now we know that the net income = Revenue - expenses

    So, $150,000 = Revenue - $1,800,000

    So, the revenue = $1,950,000
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