Gilkey Corporation Began The Year With Retained Earnings Of $310,000. During The Year, The Company Issued $420,000 Of Common Stock, Recorded Expenses Of $1,200,000, And Paid Dividends Of $80,000. If Gilkey's Ending Retained Earnings Was $330,000, What Was The Company's Revenue For The Year?
Before answering this multiple choice question, let’s know little bit about accounting terms used in the formulas. Expenses: Expenses are the costs of doing business. Revenues: Revenues are income earned by the business by selling goods or services during the current accounting period. If the business makes revenues from its day-to-day activities, then the business is performing well during the period. Net Income It is the difference between revenues and expenses for the period. Retained Earnings: Earnings retained in the business to be used for purchasing assets, stabilizing & growing business, etc. Beginning Retained Earnings Earnings of the previous accounting period. Ending Retained Earnings These are earnings retained during the current accounting period. Dividends: Share of profits distributed to shareholders / stockholders of the company / corporation who invested into the business to get a share of returns on their investments. The correct option of this multiple cho...