Question

Hill

Insurance Agency started the year with a beginning Retained Earnings balance of

$24,500.

During the​ year,

Hill  

Insurance Agency earned

$33,000

of Service Revenue and incurred

$24,000

of various expenses. Dividends of

$16,000

from the business were paid to stockholders. After the closing entries are recorded and​ posted, what will be the balance of Retained​ Earnings?

Post the beginning balance and closing entry amounts to the Retained Earnings account. Use a​ "Bal." posting reference to show the beginning and ending balance of the Retained Earnings account. Use a​ "Clos." posting reference to show the amounts that are posted while closing the books. The revenue and expense amounts should be combined into one closing entry for net income​ (like you are closing the Income Summary​ account).

Answer 1

Computation of Net Income
Insurance Agency earned	$33,000
Less:Expenses	$24,000
Net Income	$9,000
Retained Earnings Statement
Retained Earnings, Opening Balance	$24,500
Add:Net Income	$9,000
Less:Dividends	-$16,000
Retained Earnings, Closing Balance	$17,500
So the Closing Balance of Retained Earnings is $17,500