Question

The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. After closing entries are posted, what will be the balance in the Retained earnings account? Total revenues $ 145,000 Total expenses 69,600 Retained earnings 92,800 Dividends 17,400

Answer 1

$150,800  will be the balance in the Retained earnings account.

Solution:

All the provisional accounts will be closed throughout the closing process at the conclusion of the accounting cycle. A trial balance is available after completion to test that the final debits are the same as total credits.

Formula to calculate retained earnings:

Beginning balance retained earnings + Revenues - Expenses - Dividends

$92,800 + $145,000 - $69,600 - $17,400 = $150,800

Revenue is the sum obtained from the sale to buyers of goods and services. During the operation, expenses are costs associated. Dividends shall be paid to their owners out of a corporate profit. The deferred benefit is the income earned throughout the company's lifespan.