Retained Earnings at the beginning and ending of the accounting period was $850 and $1,800, respectively. If revenues were $3,300 and dividends paid to stockholders were $750, expenses for the period must have been:

A. $1,650.

B. $1,000.

C. $ 650.

D. $1,450.

$1,600 (Not given in the options)

Explanation:

Retained earnings is the accumulated balance of an entity's net income over the years. Change between the opening retained earnings and the closing retained earnings of an entity is due to the net income/loss for the period and amount of dividend declared and paid during the period.

Opening retained earnings + net income - dividend = closing retained earnings

850 + net income - 750 = 1800 (all amounts are in $)

net income = 1800 + 750 - 850

= $1700

Net income is the difference between revenue and expenses.

Hence the expenses for the period

= $3,300 - $1,700

= $1,600

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