on december 31, a company had the following accounts with normal balances. notes payable $17,000 accumulated…

on december 31, a company had the following accounts with normal balances. notes payable $17,000 accumulated depreciation - equipment $31,000 prepaid insurance 4,100 accounts receivable 7,200 interest expense 620 advertising expense 2,900 accounts payable 9,100 interest payable 740 salaries payable 2,400 unearned revenue 1,400 cash 47,000 office supplies expense 520 salaries expense 9,100 equipment 200,000 insurance expense 3,400 dividends 11,000 common stock 23,600 depreciation expense - equipment 16,000 retained earnings 91,600 office supplies 1,600 services revenue 87,500 rental revenue 12,300 complete this question by entering your answers in the tabs below. prepare the statement of retained earnings for the year ended december 31. the retained earnings account balance was $90,000 on december 31 of the prior year.

on december 31, a company had the following accounts with normal balances. notes payable $17,000 accumulated depreciation - equipment $31,000 prepaid insurance 4,100 accounts receivable 7,200 interest expense 620 advertising expense 2,900 accounts payable 9,100 interest payable 740 salaries payable 2,400 unearned revenue 1,400 cash 47,000 office supplies expense 520 salaries expense 9,100 equipment 200,000 insurance expense 3,400 dividends 11,000 common stock 23,600 depreciation expense - equipment 16,000 retained earnings 91,600 office supplies 1,600 services revenue 87,500 rental revenue 12,300 complete this question by entering your answers in the tabs below. prepare the statement of retained earnings for the year ended december 31. the retained earnings account balance was $90,000 on december 31 of the prior year.

Answer

Explanation:

Step1: Identify revenues

Service revenue is $87,500 and rental revenue is $12,500. Total revenues = $87,500 + $12,500=$100,000.

Step2: Identify expenses

Interest expense is $820, advertising expense is $2,900, salaries expense is $9,100, insurance expense is $3,400, office - supplies expense is $520, and depreciation expense - equipment is $16,000. Total expenses=$820 + $2,900+ $9,100 + $3,400+ $520 + $16,000 = $32,740.

Step3: Calculate net income

Net income = Total revenues - Total expenses = $100,000 - $32,740 = $67,260.

Step4: Calculate ending retained earnings

Beginning retained earnings (prior year end) is $90,000, dividends are $11,000. Ending retained earnings=Beginning retained earnings+Net income - Dividends = $90,000 + $67,260- $11,000=$146,260.

Answer:

Statement of Retained Earnings
For Year Ended December 31
Retained earnings, December 31 prior year end $90,000
Add: Net income $67,260
Less: Dividends $11,000
Retained earnings, December 31 current year end $146,260