The following account balances were taken from the adjusted trial balance of Kendall Company:
$\begin{array}{lr}
\text {Revenues }&\$22,400\
\text { Operating Expenses}&15,000\
\text { Dividends}&4,500\
\text { Retained Earnings}&17,000\
\end{array}$

What is the Retained Earnings account balance that will be included on the post-closing trial balance?

Question

The following account balances were taken from the adjusted trial balance of Kendall Company:
$\begin{array}{lr}
\text {Revenues }&\$22,400\
\text { Operating Expenses}&15,000\
\text { Dividends}&4,500\
\text { Retained Earnings}&17,000\
\end{array}$

What is the Retained Earnings account balance that will be included on the post-closing trial balance?

Quizplus · Accepted Answer

The Retained Earnings balance after closing is calculated as the beginning Retained Earnings ($17,000) plus Net Income (Revenues $22,400 - Operating Expenses $15,000 = $7,400) minus Dividends ($4,500), resulting in $19,900.

The Following Account Balances Were Taken from the Adjusted Trial