The following accounts and balances were drawn from the records of Carolina Company on December 31, 2016:

Cash $ 4,000

Accounts receivable $ 3,400

Dividends 2,000

Common stock 3,900

Land 3,200

Revenue 3,200

Accounts payable 1,800

Expense 2,200

The amount of Carolina's retained earnings after closing on December 31, 2016 was:

a. $5,900.

b. $7,200.

c. $3,900.

d. $4,900.

c. $3,900

Explanation:

Net Income is calculated first because it is to be included in the calculation of Retained Earnings.

Net Income for the year is $1,000

The formula to calculate the Net Income is as follows :

Revenue - Expense

$3,200 - $2,200 = $1,000.

The formula to calculate Retained Earnings is as follows :

Total Assets - Total Liabilies + Net Income = Retained Earnings

($4,000+ $3,400 + $3,200) - ($2,000 + $3,900 + $1,800) + $1,000

($10,600) - (7,700) + $1,000 = $3,900.

i am asked a question by the teacher.

or

a question is asked by the teacher.

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23