Gilkey Corporation began the year with retained earnings of $465,000. During the year, the company issued $630,000 of common stock, recorded expenses of $1,800,000, and paid dividends of $120,000. If Gilkey's ending retained earnings was $495,000, what was the company's revenue for the year?

Question

Business

Yasmine Hamilton

29 August, 01:53

Gilkey Corporation began the year with retained earnings of $465,000. During the year, the company issued $630,000 of common stock, recorded expenses of $1,800,000, and paid dividends of $120,000. If Gilkey's ending retained earnings was $495,000, what was the company's revenue for the year?

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Answers (1)

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Jordyn Irwin · Answer 1

The company's revenue for the year is $1,950,000

Explanation:

In this question, we apply the retained earning equation which is shown below:

Ending retained earning balance = Beginning retained earning balance + net income - dividend paid

$495,000 = $465,000 + net income - $120,000

So, the net income = $150,000

Now we know that the net income = Revenue - expenses

So, $150,000 = Revenue - $1,800,000

So, the revenue = $1,950,000