Question

Skysong, Inc. compiled the following financial information as of December 31, 2022:

Service revenue $827000
Common stock 181000
Equipment 232000
Operating expenses 748000
Cash 202000
Dividends 64000
Supplies 38000
Accounts payable 113000
Accounts receivable 95000
Retained earnings, 1/1/22 444000

Skysong's retained earnings on December 31, 2022 are:_________

Answer 1

$459,000

Step-by-step explanation:

The computation of the ending retained earning balance is shown below:

Ending retained earning balance is

= Opening retained earning balance + net income - dividend

where

Net income

= Service revenue - operating expenses

= $827,000 - $748,000

= $79,000

Now the ending retained earnings balance is

= $444,000 + $79,000 - $64,000

= $459,000