Question

Saved Required information The following information applies to the questions displayed below.) The financial statements of Calloway Company prepared at the end of the current year contained the following elements and corresponding amounts: Assets = $35,000, Liabilities = ?Common Stock = $6,500, Revenue = $14,000; Dividends * $1,500; Beginning Retained Earnings - $4,500; Ending Retained Earnings = $8,500. Based on this information, what was the amount of expenses reported on Calloway's income statement for the current year? Multiple Choice 0 $4,000 0 $8,500 0 0 $17,000

Answer 1

Beginning Retained earnings = $4,500

Ending Retained earnings = $8,500

Revenue = $14,000

Dividends = $1,500

Expenses = ?

Ending Retained earnings = Beginning Retained earnings + Revenue - Dividends - Expenses

8,500 = 4,500 + 14,000 - 1,500 - Expenses

Expenses = $8,500

Third option is correct

All other information given in the question is irrelevant while calculating expenses.

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