Question

Required information (The following information applies to the questions displayed below.) Liu Zhang operates Lawson Consulting, which began operations on June 1. The Retained Earnings account balance at June 1 was $0 and the owner invested $14,540 cash in the company on June 1. On June 30, the company's records show the following accounts and amounts for the month of June. Cash Accounts receivable Equipment Accounts payable Common stock $ 7,000 4,900 6,900 3,360 14,540 Dividends Service revenue Rent expense Wages expense $ 1.900 13,200 2,400 8,000 Use the above information to prepare a June statement of retained earnings for Lawson Consulting, LAWSON CONSULTING Statement of Retained Earnings 0 $ 0

Answer 1

Correct Answer:

Lawson Consulting
Statement of Retained earning
beginning balance retained earning		$                -
Add: Net income		$         2,800
Total		$         2,800
Less: Dividends		$       (1,900)
Ending balance Retained earnings		$             900

Working:

income statement
service revenue	$      13,200.00
Less: Expense
rent expenses	$        2,400.00
wages expenses	$        8,000.00
Total expenses	$      10,400.00
Net income	$        2,800.00

Lawson Consulting
Statement of Retained earning
beginning balance retained earning		$                -
Add: Net income		$         2,800
Total		$         2,800
Less: Dividends		$       (1,900)
Ending balance Retained earnings		$             900

End of Answer.

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