Use this information to answer the following question. The Retained Earnings,Dividends,and Income Summary accounts for Gula's Repair Corporation for the accounting period are presented below in T account form after the recording and posting of closing entries:

The ending balance of Retained Earnings is

Question

Use this information to answer the following question. The Retained Earnings,Dividends,and Income Summary accounts for Gula's Repair Corporation for the accounting period are presented below in T account form after the recording and posting of closing entries:

The ending balance of Retained Earnings is

Quizplus · Accepted Answer

The ending balance of Retained Earnings is the sum of the beginning balance of Retained Earnings plus the Net Income for the period less the Dividends paid. From the given T-accounts, the beginning balance of Retained Earnings is $100, the Net Income for the period is $500 ($2,000 credit in Income Summary and $1,500 debit in Dividends), and the Dividends paid is $200. Therefore, the ending balance of Retained Earnings is $400 ($100 beginning balance + $500 Net Income - $200 Dividends) which corresponds to option D.

Use This Information to Answer the Following Question