Question

The account balances and income statement of Winniford Towing Service at June 30​, 2018​, ​follow: LOADING...​(Click the icon to view the account​ balances.)LOADING...​(Click the icon to view the income statement for the​ month.) Requirements 1. Prepare the statement of retained earnings for Winniford Towing Service for the month ending June 30​, 2018. 2. What does the statement of retained earnings​ report? Requirement 1. Prepare the statement of retained earnings for Winniford Towing Service for the month ending June 30​, 2018.

Answer 1

A. $8,200

B. $7,800

C.The retained earnings will​ report the changes in retained earnings for a business entity during a time period

Step-by-step explanation:

A. Preparation of the statement of retained earnings

Statement of Retained earnings for the month ending June 30​, 2018.

Retained Earning June 1 2018 $3,400

Add Net income for the month $7,800

Total $11,200

Less:Dividend $3,000

Retained earnings June 30 $8,200

($11,200-$3,000)

Therefore the Statement of Retained earnings for June 30 will shows the amount of $8,200

2.Preparation of Income statement

Income statementfor the month ending June 30​, 2018.

Revenue:

Service Revenue $10,800

Less :Expenses

Salary expenses ($2,200)

Rent expenses ($800)

Net income $7,800

($10,800-$3,000)

Therefore Winniford Towing Service Income statement Net income show the amount of $7,800.

C. Based on the above calculation the statement of retained earnings will​ report the changes in retained earnings for a business entity during a time period