Question

Prior to closing, Syracuse Company's accounting records showed the following balances $6,880 8,050 1,000 4,900 1,550 700 1,300 Retained earnings ervice revenue Interest revenue salaries expense Operating expense Interest expense Dividends After closing, Syracuse's retained earnings balance would be Multiple Choice $6,800. $8.700. $7400 $10.000 K Pre

Answer 1

Answer:

Based on the opening retained earnings value, none of the options is correct.

The correct Syracuse`s retained earnings after closing would be $7,480.

Explanation:

Retained earnings is the residual proportion of the total profit of the firm that is left after deducting dividend received by the shareholders.

For each accounting period, closing residual retaining is calculated by adding the opening retained earnings with the net amount of the total profit remaining after deducting dividend.

To calculate closing retained earnings, it is important to get the total profit of the firm and then deduct dividend:

                                                       $

Service Revenue                         8,050

Interest Revenue                         1000

                                                    9,050

Salaries Expense                       (4,900)

Operating Expense                    (1,550)

Interest Expense                        (700)

Net Profit                                    1900

Dividend                                     (1300)

Retained Earning                        600

Retained Earning B/f                6,880

Retained Earning B/d               7,480