Question

A company has the following information available for the year ending December 31, 2019:_______.

Service Revenue $91,300
Operating Expenses $52,900
Gain on Sale of Land $32,000
Loss on Sale of Equipment ($2,000)
Retained Earnings, 12/31/2019 $100,000
Dividends declared in 2019 $22,000
Required:
Calculate the company's (A) net income or loss for the year ending December 31, 2019 and (B) the balance in Retained earnings on January 1, 2019, the beginning of the fiscal year.

Answer 1

2019

Step-by-step explanation:

Answer 2

a. $4,400

b. $117,600

Step-by-step explanation:

The computation of the net income or loss for the year is shown below:

= Service revenue + gain on sale of land - operating expenses - loss on sale of equipment

= $91,300 + $32,000 - $52,900 - $2,000

= $4,400

Now the beginning retained earning balance is

As we know that

Ending retained earning balance = Opening retained earning balance + net income - dividend paid

$100,000 = Opening retained earning balance + $4,400 - $22,000

So,

The Opening retained earning balance

= $100,000 + $22,000 - $4,400

= $117,600