Question

QP Corp. has a beginning retained earnings balance of $16,000. An adjusted trial balance shows total expenses of $24,000 and service revenue of $28,000. If dividends for the year were $1,800, determine the year-end retained earnings to be reported on the Statement of Retained Earnings.

Answer 1

Answer:

$18,200

Explanation:

The computation of the year end retained earning balance is shown below:

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

where,

Net income equals to

= Service revenue - total expenses

= $28,000 - $24,000

= $4,000

So, the retained earning ending balance would be

= $16,000 + $4,000 - $1,800

= $18,200