On September 1, 2019, Chartreuse Dog, Inc. reported Retained Earnings of $408,000. During the month of September, Chartreuse Dog generated revenues of $60,000, incurred expenses of $36,000, purchased equipment for $15,000 and paid dividends of $18,000.
What is the balance in Retained Earnings on September 30, 2019?

Question

Quizplus · Accepted Answer

Ending Retained earnings = Beginning Retained earnings + Revenues - Expenses -Dividends
X = $408,000 + $60,000 - $36,000 - $18,000
X = $414,000 (The balance is a credit, the normal balance for the Retained Earnings account.)