Question

Daniel Hair Stylists' adjusted trial balance and income statement follow. Prepare Daniel's statement of retained earnings for the year ended December 31, 2018.
Daniel Hair Stylists Income Statement, Year Ended December 31, 2018

Revenues
Service Revenue $16,700
Expenses
Rent Expense $5,100
Interest Expense 2,400
Depreciation Expense - Equipment 1,700
Supplies Expense 500
Total Expenses 9,700
Net Income (Loss) $7,000
Daniel Hair Stylists Adjusted Trial Balance

Account Title Debit Credit
Cash $1,200
Accounts Receivable 1,900
Office Supplies 1,000
Equipment 19,700
Accumulated Depreciation - Equipment $1,700
Accounts Payable 950
Interest Payable 800
Notes Payable 3,500
Common Stock 10,950
Dividends 1,100
Service Revenue 16,800
Rent Expense 5,100
Supplies Expense 500
Depreciation Expense - Equipment 1,700
Interest Expense 2,400
Total $34,600 $34,600

Answer 1

Answer:

Explanation:

The preparation of the statement of retained earnings is shown below:

                                              Daniel Hair Stylists'

                                    Statement of retained earnings

                           For the year ended December 31, 2018

Beginning retained earning balance        $0

Less: Net loss                                            -$7,000

Less: Dividend paid                                  -$1,100

Ending retained earning balance           -$8,100