Kincaid Company's Retained Earnings balance on January 1 was $6,000.During the current year,Kincaid earned $3,400 in revenues and incurred $4,200 in expenses.Kincaid declared and paid $2,500 in dividends,all in cash.After the closing entries are made,Kincaid's Retained Earnings balance on December 31 will be:

Question

Quizplus · Accepted Answer

The Retained Earnings balance is calculated as: Beginning Retained Earnings + Net Income - Dividends. Net Income is Revenues - Expenses, which is $3,400 - $4,200 = -$800. Therefore, the Retained Earnings balance is $6,000 - $800 - $2,500 = $2,700.

Kincaid Company's Retained Earnings Balance on January 1 Was $6,000