The Retained Earnings account has a credit balance of $17,000 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)$8,000
B)$15,400
C)$23,400
D)$17,000
E)$32,400

Question

Quizplus · Accepted Answer

The ending balance in the Retained Earnings account can be calculated using the formula:

Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends

In this case, the Beginning Retained Earnings is given as $17,000.

The Net Income can be calculated by subtracting the total expenses from the total revenues:

Net Income = Total Revenue - Total Expenses
Net Income = $55,200 - $39,800
Net Income = $15,400

Finally, subtract the dividends from the net income:

Ending Retained Earnings = $17,000 + $15,400 - $9,000
Ending Retained Earnings = $23,400

Therefore, the ending balance in the Retained Earnings account after all closing entries are made is $23,400. The correct answer is C.

The Retained Earnings Account Has a Credit Balance of $17,000