Warren Enterprises had the following events during Year 1:The business issued $40,000 of common stock to its stockholders.The business purchased land for $24,000 cash.Services were provided to customers for $32,000 cash.Services were provided to customers for $10,000 on account.The company borrowed $32,000 from the bank.Operating expenses of $24,000 were incurred and paid in cash.Salary expense of $1,600 was accrued.A dividend of $8,000 was paid to the stockholders of Warren Enterprises.Assuming the company began operations during Year 1, the amount of retained earnings as of December 31, Year 1 would be:
A. $8,400
B. $10,000
C. $16,400
D. $42,000
Answer: A
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