The Retained earnings account has a credit balance of $37,000 before closing entries are made.If total revenues for the period are $55,200,total expenses are $39,800,and dividends are $9,000,what is the ending balance in the Retained earnings account after all closing entries are made?
A)$37,000.
B)$35,400.
C)$43,400.
D)$28,000.
E)$52,400.

Question

Quizplus · Accepted Answer

To find the ending balance in the Retained earnings account, we need to start with the credit balance of $37,000 and then add any net income earned during the period and subtract any dividends paid.

Net income = Total Revenues - Total Expenses 
Net income = $55,200 - $39,800 
Net income = $15,400

Ending balance in Retained earnings account = Credit balance + Net income - Dividends 
Ending balance in Retained earnings account = $37,000 + $15,400 - $9,000 
Ending balance in Retained earnings account = $43,400

Therefore, the correct choice is (C).

The Retained Earnings Account Has a Credit Balance of $37,000