Question

The following account balances were taken from the adjusted trial balance of Kendall Company: Revenues $ 22,400 Operating Expenses 15,000 Dividends 4,500 Retained Earnings 17,000 What is the Retained Earnings account balance that will be included on the post-closing trial balance?

Answer 1

The Retained Earnings balance on the post-closing trial balance is $19,900, updated for this period's net income and dividends paid.

Step-by-step explanation:

To calculate the Retained Earnings balance that will be included on the post-closing trial balance, we need to update the initial Retained Earnings with the current period's net income or loss and then subtract any dividends paid. The net income is found by subtracting Operating Expenses from Revenues.

Here's the calculation:

Net Income = Revenues - Operating Expenses = $22,400 - $15,000 = $7,400.

Updated Retained Earnings = Beginning Retained Earnings + Net Income - Dividends = $17,000 + $7,400 - $4,500 = $19,900.

The Retained Earnings account balance on the post-closing trial balance will be $19,900.

Answer 2

Retained earnings-Closing = $19,900

Step-by-step explanation:

Given that,

Revenues = $22,400

Operating Expenses = $15,000

Dividends = $4,500

Retained Earnings(opening) = $17,000

Net Income = Revenues - Operating expenses

= $ 22,400 - $15,000

= $7,400

Statement of Retained Earnings:

Retained earnings-Closing:

= Retained earnings -opening + Net Income - Dividends

= $17,000 + $7,400 - $4,500

= $19,900