A company had the following account balances at the beginning of the year:

• Cash of $10,000
• Accounts receivable of $5,000
• Inventory of $7,000
• Property, plant, and equipment of $20,000
• Accounts payable of $3,000
• Long-term debt of $12,000
• Common stock of $10,000
• Retained earnings of $7,000

During the year, the company had the following transactions:

• Sales revenue of $50,000
• Cost of goods sold of $30,000
• Paid off $4,000 of accounts payable
• Paid $2,000 in dividends to shareholders
• Issued $5,000 in additional common stock
• Purchased a new piece of equipment for $8,000 using long-term debt
• Depreciation expense for the year was $1,000

Calculate the company's ending balance of retained earnings at the end of the year.

Answer rating: 100% (QA)

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