At September 1, 2022, Baxter Inc.reported Retained Earnings of $423,000.During the month, Baxter generated revenues of $60,000, incurred expenses of $36,000, purchased equipment for $15,000 and paid dividends of $6,000.What is the balance in Retained Earnings at September 30, 2022?
A)$423,000 debit
B)$24,000 credit
C)$426,000 credit
D)$441,000 credit

Question

Quizplus · Accepted Answer

The retained earnings at the end of September is calculated by adding net income (revenues minus expenses) and subtracting dividends from the beginning retained earnings. Net income is $60,000 - $36,000 = $24,000. Retained earnings at September 30 is $423,000 + $24,000 - $6,000 = $441,000. The equipment purchase does not affect retained earnings directly.