Question

Which is the correct answer

Spring 2020 Section 902 (1) Quiz: chapter 4 quiz This Question: 1 pt + 3 of Refer to the following adjusted trial balance after the first year of operations. Credit Debit $1,600 8,200 400 19,500 Equipment Accounts Cash Accounts Receivable Office Supplies Equipment Accumulated Depreciation Accounts Payable Salaries Payable Uneared Revenue Common Stock Dividends O A. $26,150 O B. $23,350 O c. $22,350 OD. $21,350 $2,000 1,400 850 300 3,800 1.000 Click to select your answer.

Answer 1

Net Income

Net Income = Total Revenue – Total expenses

= Service revenue – [Salaries expenses + Supplies expenses + Depreciation expenses]

= $49,650 – [$23,000 + $2,300 + $2,000]

= $49,650 - $27,300

= $22,350

Therefore, the balance of the Retained earnings accounts = Retained earnings at the beginning + Net Income for the year – Dividends paid

= $0 + $22,350 - $1,000

= $21,350

“Hence, the balance of the Retained earnings accounts will be $21,350”