At the end of the third year of operation, Alger Corporation has total assets equal to $100,000, liabilities totaling $90,000, and contributed capital of $30,000.What is the balance in retained earnings?
A)$40,000 (Dr)
B)$40,000 (Cr)
C)$20,000 (Dr)
D)$10,000 (Cr)
E)$20,000 (Cr)

Question

Quizplus · Accepted Answer

Retained Earnings = Total Assets - Liabilities - Contributed Capital
Retained Earnings = $100,000 - $90,000 - $30,000
Retained Earnings = $20,000 (Dr)

At the End of the Third Year of Operation, Alger