Prior to closing the accounts, Syracuse Company's accounting records showed the following balances: $\begin{array}{lr}
\text { Retained earnings } & \$ 16,800 \
\text { Service revenue } & 21,750 \
\text { Interest revenue } & 1,800 \
\text { Salaries expense } & 12,300 \
\text { Operating expense } & 3,450 \
\text { Interest expense } & 900 \
\text { Dividends } & 2,700
\end{array}$
After closing the accounts, Syracuse's retained earnings balance would be

Question

Prior to closing the accounts, Syracuse Company's accounting records showed the following balances: $\begin{array}{lr}
\text { Retained earnings } & \$ 16,800 \
\text { Service revenue } & 21,750 \
\text { Interest revenue } & 1,800 \
\text { Salaries expense } & 12,300 \
\text { Operating expense } & 3,450 \
\text { Interest expense } & 900 \
\text { Dividends } & 2,700
\end{array}$
 After closing the accounts, Syracuse's retained earnings balance would be

Quizplus · Accepted Answer

To find Syracuse's retained earnings after closing the accounts, we need to start with the beginning balance (given in the question) and then add the net income or subtract the net loss and then subtract the dividends paid to get the final retained earnings balance.

The beginning balance of retained earnings is $12,000. The income statement shows that the company had net income of $9,000. So, we add $9,000 to $12,000 to get $21,000.

The final step is to subtract the dividends paid, which is given as $0 in the question.

Therefore, the final retained earnings balance after closing the accounts is $21,000. So, the correct choice is C.

Prior to Closing the Accounts, Syracuse Company's Accounting Records Showed