Question

The adjusted tabular summary of Warbocks Corporation at December 31, 2022 includes the following accounts: Retained Earnings $12,600; Dividends $5,000; Service Revenue $30,000; Salaries and Wages Expense $15,000; Insurance Expense $2,000; Rent Expense $4,500; Supplies Expense $500; and Depreciation Expense $1,000. Prepare a retained earnings statement for the year.

Answer 1

First calculate Net Income;

= Service revenue - Salaries and Wages Expense - Insurance Expense - Rent Expense - Supplies Expense - Depreciation Expense

= 30,000 - 15,000 - 2,000 - 4,500 - 500 - 1,000

= $7,000

Statement of Retained Earnings

Beginning Balance $12,600

Add: Net Income $ 7,000

$19,600

Less: Dividends $5,000

Closing Balance $14,600