Question

The adjusted trial balance of Novak Corporation at December 31, 2022 includes the following accounts: Retained Earnings $12,852; Dividends $5,100; Service Revenue $30,600; Salaries and Wages Expense $15,300; Insurance Expense $2,040; Rent Expense $4,590; Supplies Expense $510; and Depreciation Expense $1,020. Prepare a retained earnings statement for the year. (List items that increase retained earnings first.)

Answer 1

The retained earnings statement for Novak Corporation for the year ended December 31, 2022, begins with a balance of $12,852, adds service revenue of $30,600, and then subtracts total expenses and dividends of $28,560 to arrive at ending retained earnings of $14,892.

Step-by-step explanation:

Retained Earnings Statement

The retained earnings statement for Novak Corporation for the year ended December 31, 2022, can be prepared by taking the beginning balance of retained earnings, adding the service revenue, and then subtracting each expense and dividends.

Here is the detailed breakdown:

• Beginning Retained Earnings (as of Jan 1, 2022): $12,852
• Add: Service Revenue: $30,600
• Less: Salaries and Wages Expense: $15,300
• Less: Insurance Expense: $2,040
• Less: Rent Expense: $4,590
• Less: Supplies Expense: $510
• Less: Depreciation Expense: $1,020
• Less: Dividends: $5,100
• Ending Retained Earnings (as of Dec 31, 2022): calculation

Therefore, the calculation for the ending retained earnings would be:

$12,852 + $30,600 - ($15,300 + $2,040 + $4,590 + $510 + $1,020 + $5,100) = Ending Retained Earnings

Ending Retained Earnings: $12,852 + $30,600 - $28,560 = $14,892

Answer 2

Answer and Explanation:

The preparation of the retained earnings is presented below:

Novak corporation

Statement of retained earnings

For the year ended Dec 31,2022

Particulars Amount

Opening bal of retained earnings $12,852

Add: Net income $7,140

($30,600 - $15,300 - $2,040 - $4,590 - $510 - $1,020)

Less: dividend paid -$5,100

Ending balance of retained earnings $14,892