Question

Partial adjusted trial balance for Sheffield Corp. at December 31, 2017, includes the following accounts: Retained Earnings $17,000, Dividends $6,700, Service Revenue $36,300 Salaries and Wages Expense $14,000, Insurance Expense $1,880, Rent Expense $4,080, Supplies Expense $1,440, and Depreciation Expense $900. The balance in Retained Earnings is the balance as of January 1.Prepare a retained earnings statement for the year assuming net income is $10,400. List items that increase retained earnings first.

Answer 1

Answer and Explanation:

The preparation of the retained earnings statement is presented below:

Beginning retained earnings balance $17,000

Add: Net income $10,400

less: Dividend -$6,700

Ending retained earnings balance $20,700

We simply added the net income and deduct the dividend from the opening retained earnings balance