Mags & Wheels, Inc reported Retained Earnings of $20, 000 at year-end 2007. The accomping income statement reported $2000 in revenues for 2007 and $1000 in expenses. The biginning 2007 balance of retained Earnings must have been what?

I guest $10000. please help?

i think 10000$ is wrong , but i just cant give u the answer because the rule of this forum.However , i can give the idea how to get the amount of beginning retained earning.

INCOME STATEMENT
Service revenue .......
Less expense (.....)
=Net income .......

Then ,
STATEMENT OF RETAINED EARNING
Beginning of Retained Earning .....
Plus Net Income .....
Less Dividends (.....)
=Ending Retained Earning .....

here the link ,http://www.principlesofaccounting.com/chapter%201.htm

i came up with 30,000 with the outine sample you gave me is this correct?

i don't know how you came up with 30 .000$.They gave the ending retained earning of 20000$, and want you to solve for beginning retained earning..

INCOME STATEMENT
Revenue: .............................2000
Expense: .............................(1000)
=Net Income:........................1000

Now the net income will go to the statement of retained earning

STATEMENT OF RETAINED EARNING
Beginning of Retained Earning ................. ???
Plus Net Income......................................1000
Less Dividends........................................(.....) in this case we have no dividend
Ending Retained Earning ..........................20.000

Now solve for "???" do a little math here (??? + 1000-0=20000)=>???=20.000-1000=19000$

i don't know how you came up with 30 .000$.They gave the ending retained earning of 20000$, and want you to solve for beginning retained earning..

INCOME STATEMENT
Revenue: .............................20000
Expense: .............................(10000)
=Net Income:........................10000

Now the net income will go to the statement of retained earning

STATEMENT OF RETAINED EARNING
Beginning of Retained Earning ................. 20000
Plus Net Income......................................10000
Less Dividends........................................( .....) in this case we have no dividend
Ending Retained Earning ..........................30000

Now solve for "???" do a little math here (10000?? + 20000=30000)
is this correct?

Yes Mary,it is correct.
the data in question you posted,you reported Revenue:2000$ and Expense : 1000$. Now this one, you have changed the amount of revenue and expense up to 10 times.That s why i did not know how you cam up with 30.000$..Anyway hope it helps