Question

The adjusted trial balance of Blossom Company at December 31, 2019, includes the following accounts: Common Stock $17,200, Dividends $7,000, Service Revenue $38,900, Salaries and Wages Expense $16,200, Insurance Expense $2,400, Rent Expense $4,600, Supplies Expense $1,000, and Depreciation Expense $1,200. The balance in Common Stock is the balance as of January 1. Prepare a retained earnings statement for the year assuming net income is $13,500 for the year and Retained Earnings is $7,900 on January 1.

Answer 1

Answer:

Explanation:

Before preparing the retained earning statement, first we have to compute the closing balance of retained earning which is shown below:

The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

= $7,900 + $13,500 - $7,000

= $14,400

The statement of retained earnings is presented in the spreadsheet. Kindly find the attachment below: