During 2010,Cruz Company earned $5,000 in cash revenue,incurred $3,200 in cash expenses,and paid $500 in cash dividends to its owners.Based on this information,
A) retained earnings increased by $1,300 during the year.
B) net income was $1,300 for 2010.
C) the net cash flow from operating activities was $1,300 for the year.
D) total assets increased by $1,800 during 2010.

Question

Quizplus · Accepted Answer

Retained earnings can be calculated by subtracting expenses and dividends paid from revenue earned. Therefore, retained earnings increased by $1,300 ($5,000 - $3,200 - $500) during the year.

During 2010,Cruz Company Earned $5,000 in Cash Revenue,incurred $3,200 in Cash