Reference no: EM132843927

Atlantic Corporation reported the following amounts at the end of the first year of operations:

Common stock $200,000
Sales revenue $800,000
Total assets $600,000
Dividends declared $40,000
Total liabilities $320,000

Problem 1: What are the retained earnings of Atlantic at the end of the year, and what amount of expenses were incurred during the year?

Option 1: Retained earnings are $80,000 and expenses incurred totaled $680,000.
Option 2: Retained earnings are $80,000 and expenses incurred totaled $720,000.
Option 3: Retained earnings are $280,000 and expenses incurred totaled $480,000.
Option 4: Retained earnings are $280,000 and expenses incurred totaled $520,000.