Question

Create a statement of Retained earnings

The following is a list of accounts of the Dienstag Company for the current year end (December 31, 2020. All of the accounts have normal balances. You are being asked to prepare an Income Statement, a statement of Retained Earnings and a classified Balance Sheet. Accounts Payable $48,000 Administrative Salary Expense $400,000 Accounts Receivable 32,000 64,000 Beginning Inventory Freight -In 56,000 48,000 Accumulated Depreciation - Building Freight-out Expense Allowance for Uncollectible Accounts 64,000 0,000 Ending Inventory Land 32,000 200,000 Land Held for Future Use Amortization Expense Bonds Payable Building 24,000 320,000 720,000 Purchases 280,000 440,000 568,000 Beginning Retained Earnings Cash Salaries Payable Common Stock Sales 56,000 400,000 120,000 56,000 40,000 25,600 16,000 1,600,000 400,000 80,000 Dividends Declared Depreciation Expense Copyright Income Taxes Payable Marketing Salary Expense Utility Expense Income Tax Expense 40%

Answer 1

DIENSTAG COMPANY

Statement of Retained earnings

Fot the year ending december31,2020

Retained earning on january1,2020	568000
add: net income earned in 2020	28800
total	596800
less: dividend declared	(120000)
reatined earning	476800

* net income = (revenue - expenses) - income tax

revenue : sales - cost of goods sold , 16000000- (560000+440000-32000)=1072000

total expenses = 1024000

income before tax = 48000

net income = 48000-40% = 28800