Question

Prepare Statement of Retained Earnings for the month of January 2019. Note: There are no prior period adjustments and all dividends declared are cash dividends in the amount of $31,060.

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Be Prepared Adjusted Trial Balance January 31, 2019 Account ID Account Description Debits Credits 1001 Cash 1021 Accounts Receiva ble 1022 Allowarce for Doubtful Acc 1027 Interest Receiva ble 1031 Notes Receivable 1051 Merchandise Invertory 1101 Store Supplies 1111 Office Supplies 1125Prepaic Insurarce 1401 Land 1411 Building 1412 Accum Dep: Building 1431 Officc Equipmert 1432 Accum Dep: Office Equipm 1451 Store Equipment 1452 Accum Depr: Store Equipm 1501 Patents 2001 Accounts Paya ble 2005Income Taxes Paya ble 2031 nterest Paya ble 2101 Notes Payable long term 2301 Bonds Paya ble 2303 Discount on Bonds Payable 3001 Preferred Stock 3011 Common Stock 3101 Paid in Capital In Excess of par: Prefer 3111 Paid in Capital In Excess of ρar: Com 3121 Paid in Capital Treasury Stock 3300 Retained Earnings 3351 Treasury Stock 4001 Sales Revenue 4002 Sales Discount 4003 Sa les Returns & Allowances 4101 nterest Revenue 5001 Cost of Goods Sold 5010 Insurance Expense General 5012 Rcpairs Expense: Office 5015Depreciation Experse: Building General 5020Dcpreciation Exp: Officc Ec 5025 Supplies Ex pense Sellirg 5027 Utilities Expense: Office 5030 Office Salaries Expense 5035 Office Payroll Tax Expense 6005 Depreciaion Exp: Store E 6010 Amortization Expense: Pa General 6015 Sales Salaries Expense 6020 Sales Payroll Tax Expense 6022 Utilities Expense: Store 6025 Delivery Expense General 6030Repairs Expense: Store 6040 Bad Debts Expense Selling 7001Interest Experse 687,490.00 $ 23,000.00 60.00 10,000.00 5,190.000 10,000.00 300.00 2,800.00 414,250.00 400,000.00 45.750.0O 90,000.00 125,000.00 69,300.00 17,500.00 15,800.00 25,000.00 7,500.00 4,778.00 200,000.00 800,000.00 23,900.00 400,000.00 105,000.00 15,000.00 166,250.00 72,000.00 53,940.00 72,000.00 139,000.00 800.00 3,000.00 84,560.00 200.00 2,500.00 750.00 1,200.00 1,500.00 15,000.00 1,200.00 10,000.00 800.00 1,100.00 1,000.00 5,878.00 2,068,038.00 $ 2,068,038.00

Answer 1

Following is the statement of retained earnings :-

	Amount
Balance of retained earnings on Jan 1	$85000
Net income during January	$4312
Dividend during Jan	($31060)
Ending balance of retained earnings as on Jan 30	$58252

Note that Balance of retained earnings in adjusted trial balance is before adding any Net income earned during January Ie. 58262-4312 = $53940

Working note

1 . Following is the profit for the month of January

Sales revenue	139000
Less : cost of goods sold	(84560)
Gross profit	54440
Sales discount	(800)
Sales return & allowances	(3000)
Insurance exp - general	(200)
Repair expense - office	(2500)
Depriciation exp - building	(750)
Depriciation exp - office eq	(2500)
Supplied exp - selling	(1200)
Utilities exp - office	(1500)
Office saleire exp	(15000)
Office payroll tax exp	(1200)
Depriciation exp + store eq	(800)
Amortization exp	(700)
Sales salaried exp	(10000)
Sales payroll tax exp	(800)
Utilities exp - store	(1100)
Delivery exp - general	(1000)
Repairs epxense - store	(800)
Bad debt exp - selling	(460)
Earning before interest and tax	10130
Interest revenue	60
Interest exp	(5878)
Net income	$4312