A company started the current year with assets of $700,000, liabilities of $350,000 and contributed capital of $200,000. During the current year, assets increased by $400,000, liabilities decreased by $50,000 and contributed capital increased by $275,000. There was no payment of dividends to owners during the year. Based on this information, what was the amount of retained earnings at the beginning of the year? a) $850,000 b) $350,000 c) $550,000 d) $150,000
A company started the current year with assets of $700,000, liabilities of $350,000 and contributed capital of $200,000. During the current year, assets increased by $400,000, liabilities decreased by $50,000 and contributed capital increased by $275,000. There was no payment of dividends to owners during the year. Based on this information, what was the amount of retained earnings at the beginning of the year? a) $850,000 b) $350,000 c) $550,000 d) $150,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A company started the current year with assets of $700,000, liabilities of
$350,000 and contributed capital of $200,000. During the current year,
assets increased by $400,000, liabilities decreased by $50,000 and
contributed capital increased by $275,000. There was no payment of
dividends to owners during the year. Based on this information, what
was the amount of retained earnings at the beginning of the year?
a) $850,000
b) $350,000
c) $550,000
d) $150,000
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