Question

The following pre-closing Trial Balance was drawn from the records of the Dakota Company.

A. Account Title Debit Credit
B. Cash $500
C. Equipment 2,000
D. Accounts Payable $1,000
E. Common Stock 700
F. Retained Earnings 600
G. Service Revenue 900
H. Operating Exp600
I. Dividends 100
J. Totals $3,200 $3,200
Based on the information in the Trial Balance, the post closing balance in the Retained Earnings account will be:

Answer 1

The post-closing balance in the Retained Earnings account of Dakota Company is calculated by starting with the beginning balance, adding Service Revenue, and then subtracting Operating Expenses and Dividends. The final post-closing balance in Retained Earnings is $800.

Step-by-step explanation:

The student has provided a pre-closing trial balance and wants to know the post-closing balance in the Retained Earnings account for the Dakota Company. To calculate the post-closing balance, we need to consider any closing entries that would affect Retained Earnings. Closing entries include revenues, expenses, and dividends. Service Revenue will increase Retained Earnings, while Operating Expenses and Dividends will decrease it.

To find the post-closing balance, we start with the beginning Retained Earnings balance of $600, add the Service Revenue of $900, and then subtract both the Operating Expenses of $600 and the Dividends of $100. The formula is as follows:

Beginning Retained Earnings + Service Revenue - (Operating Expenses + Dividends) = Post-closing Retained Earnings

$600 + $900 - ($600 + $100) = $800

Therefore, the post-closing balance in the Retained Earnings account will be $800.