Big-Mouth Frog Corporation had revenues of $200,000, expenses of $120,000, and dividends of $30,000. When Income Summary is clos

Question

3 years ago

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Big-Mouth Frog Corporation had revenues of $200,000, expenses of $120,000, and dividends of $30,000. When Income Summary is clos

ed to Retained Earnings, the amount of the debit or credit to Retained Earnings is a Group of answer choices debit of $50,000. debit of $80,000. credit of $50,000. credit of $80,000.

Business

1 answer:

Aleksandr-060686 [28] · Answer 1 · 2022-07-17T13:21:37+03:00

Answer:

Credit of $80,000

Explanation:

Big-Mouth Frog Corporation Calculation for Retained earnings

Using this formula

Retained earnings =Revenue- Expenses

Where,

Revenue =$200,000

Expenses =$180,000

Let plug in the formula

Retained earnings =$200,000-$180,000

Retained earnings =$80,000

Therefore when the Income Summary is closed to Retained Earnings, the amount of the credit to Retained Earnings will be $80,000