The Retained Earnings account has a credit balance of $37,000 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)$37,000.
B)$35,400.
C)$43,400.
D)$28,000.
E)$52,400.

Question

Quizplus · Accepted Answer

First, we need to find the net income for the period:

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

Next, we need to adjust the Retained Earnings account for dividends paid:

Retained Earnings = Beginning Retained Earnings + Net Income - Dividends 
Retained Earnings = $37,000 + $15,400 - $9,000 
Retained Earnings = $43,400

Therefore, the ending balance in the Retained Earnings account after all closing entries are made is $43,400. The correct answer is (C).

The Retained Earnings Account Has a Credit Balance of $37,000