ending balance of the Retained Earnings account for Capri Company is $70,900.
To calculate the ending balance of the Retained Earnings account for Capri Company, we need to follow the steps of the accounting cycle, which includes closing the temporary accounts and transferring their balances to the Retained Earnings account.
First, we need to close the revenue accounts and transfer their balances to the Retained Earnings account:
Services revenue $92,000
Interest revenue $9,200
Total revenue $101,200
To close the revenue accounts, we debit them and credit the Retained Earnings account:
Debit Services revenue $92,000
Debit Interest revenue $9,200
Credit Retained Earnings $101,200
Next, we need to close the expense accounts and transfer their balances to the Retained Earnings account:
Salaries expense $40,500
Depreciation expense $8,400
Utilities expense $6,400
Total expenses $55,300
To close the expense accounts, we credit them and debit the Retained Earnings account:
Credit Salaries expense $40,500
Credit Depreciation expense $8,400
Credit Utilities expense $6,400
Debit Retained Earnings $55,300
Finally, we need to close the Dividends account and transfer its balance to the Retained Earnings account:
Debit Dividends $16,000
Credit Retained Earnings $16,000
The ending balance of the Retained Earnings account can be calculated as follows:
Beginning balance $41,000
Add: Total revenue $101,200
Less: Total expenses $55,300
Less: Dividends $16,000
Ending balance $70,900
Therefore, the ending balance of the Retained Earnings account for Capri Company is $70,900.