The following accounts and balances were obtained from the records of Barnes Company: Based on this information alone the amount of Barnes's retained earnings is:
A)$11,600.
B)$17,200.
C)$5,200.
D)None of these answers is correct.

Question

The following accounts and balances were obtained from the records of Barnes Company:  Based on this information alone the amount of Barnes's retained earnings is:
A)$11,600. 
B)$17,200. 
C)$5,200. 
D)None of these answers is correct.

Quizplus · Accepted Answer

Retained earnings can be calculated by subtracting the total liabilities and common stock from the total assets. In this case, we have:
Total assets = $22,200
Total liabilities = $9,800
Common stock = $7,200
Retained earnings = Total assets - Total liabilities - Common stock
Retained earnings = $22,200 - $9,800 - $7,200
Retained earnings = $5,200

The Following Accounts and Balances Were Obtained from the Records