Question

At September 1, 2022, Coronado Industries reported Retained Earnings of $397620. During the month, Coronado generated revenues of $56400, incurred expenses of $33840, purchased equipment for $14100 and paid dividends of $5640. What is the balance in Retained Earnings at September 30, 2022

Answer 1

Closing retained earning is $414,540

Step-by-step explanation:

The Retained Earnings figure can be calculated using the following equation:

Closing Retained Earnings = Opening Retained Earnings + (Sales - Expenses - Dividends)

Here

Opening balance of Retained Earning is $397,620

Revenues is $56,400

Expenses are $33,840

Dividends paid are $5,640

The purchased equipment is not considered here because it is increase in asset not an increase or decrease in revenue or expenses. So it is not considered here.

So by putting values, we have:

Closing Retained Earnings = $397,620 + ($56,400 - $33,840 - $5,640)

Closing Retained Earnings = $414,540