the following accounts and balances are taken from moore companys adjusted trial balance:\naccounts payable…

the following accounts and balances are taken from moore companys adjusted trial balance:\naccounts payable $10,000\naccounts receivable 2,800\naccumulated depreciation 1,500\ndepreciation expense 1,100\ndividends 2,500\ninsurance expense 2,200\ninterest revenue 1,440\nprepaid insurance 2,320\nretained earnings, beginning balance 10,100\nsalary expense 23,100\nservice revenue 35,800\nwhat is the ending balance in retained earnings after the closing entries are completed?\na. $10,840\nb. $37,240\nc. $18,440\nd. $8,340

the following accounts and balances are taken from moore companys adjusted trial balance:\naccounts payable $10,000\naccounts receivable 2,800\naccumulated depreciation 1,500\ndepreciation expense 1,100\ndividends 2,500\ninsurance expense 2,200\ninterest revenue 1,440\nprepaid insurance 2,320\nretained earnings, beginning balance 10,100\nsalary expense 23,100\nservice revenue 35,800\nwhat is the ending balance in retained earnings after the closing entries are completed?\na. $10,840\nb. $37,240\nc. $18,440\nd. $8,340

Answer

Explanation:

Step1: Calculate Net Income

Net Income = Service Revenue + Interest Revenue - Depreciation Expense - Insurance Expense - Salary Expense Net Income = (35800 + 1440-(1100 + 2200+23100)) Net Income = (37240 - 26400) Net Income = (10840)

Step2: Calculate Ending Retained Earnings

Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends Ending Retained Earnings = (10100+10840 - 2500) Ending Retained Earnings = (18440)

Answer:

C. $18,440