During January 2014, its first month of operation, Osborn Enterprises earned net income of $1,700 and paid dividends to the owners of $500. At January 31, the balance in Retained Earnings will be
A) $0.
B) $1,700 credit.
C) $1,200 credit.
D) $500 debit.

Question

Quizplus · Accepted Answer

Retained Earnings is calculated as net income minus dividends. Therefore, $1,700 (net income) - $500 (dividends) = $1,200 credit balance in Retained Earnings.

During January 2014, Its First Month of Operation, Osborn Enterprises