Question

Turner Company had a retained earnings account balance of $560,200 at January 1, 2012. During 2012, the company has revenues of $380,000, operating expenses of $296,400, Non-operating expenses of $28,000, and declared (on December 1) a dividend of $25,000 payable on February 1, 2013. Near the end of 2012, the company purchased a new building paying cash down of $400,000 and entering into a note payable for the balance of $360,000. What was the company's ending retained earnings account balance on December 31, 2012?

Answer 1

The total balance of retained earnings account on December 31 $590.800

Step-by-step explanation:

Assets

Cash $575.800

Building $400.000

TOTAL ASSETS $975.800

Liabilities

Dividends Payable $25.000

Notes Payable $360.000

TOTAL LIABILITIES $385.000

Equity

Retained Earnings $590.800

TOTAL EQUITY $590.800

Income Statement

Sales $380.000

Salaries Expenses -$296.400

Miscellaneous Expenses -$28.000

Net Income $55.600