Reference no: EM132472702
Problem - On May 1, Joseph Carpenter opened a printing business, Carpenter Printing Incorporated. Joseph invested $40,000 of his savings, plus $74,000 in printing equipment, in exchange for capital stock of the business. The monthly depreciation on the printing equipment is estimated to be $1,200.
On May 2, Carpenter Printing rented office space, issuing a check for $16,500, paying the first three months' rent in advance.
On May 2, Carpenter Printing purchased a 12 month umbrella insurance policy, issuing a check for $4,800.
On May 7, Carpenter Printing purchased supplies on account for $10,000, $1,400 of which will be unused at the end of May.
On May 9, Carpenter Printing printed $13,000 in magazines for the Pierre Company. The magazines were delivered on May 9, along with an invoice for $7,500 due June 9. The remaining $5,500 will be invoiced in June and will be due on July 9.
On May 20, Cecil Advertising Agency paid Carpenter Printing $12,000 ($7,000 to print advertisements in May and $5,000 to print advertisements in June). On May 30, $7,000 of advertisements were printed and delivered.
On May 30, dividends of $1,000 were paid.
Required - Assuming no further transactions, Calculate the Increase (Decrease) in Retained Earnings on the Statement of Retained Earnings of Carpenter Printing Incorporated For the Month Ended May 31?
a. 3,300
b. (2,000)
c. 5,000
d. 4,300
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