frosty incorporated has the following balances on december 31 prior to the closing process: revenues $41,800…

frosty incorporated has the following balances on december 31 prior to the closing process: revenues $41,800 retained earnings, january 1 8,600 cash 8,200 expenses 23,700 accounts payable 2,700 dividends 2,900 supplies 18,300 based upon the balances above, how will retained earnings change as a result of the closing process? multiple choice increase of $15,200 increase of $17,200 increase of $18,200 increase of $16,200

frosty incorporated has the following balances on december 31 prior to the closing process: revenues $41,800 retained earnings, january 1 8,600 cash 8,200 expenses 23,700 accounts payable 2,700 dividends 2,900 supplies 18,300 based upon the balances above, how will retained earnings change as a result of the closing process? multiple choice increase of $15,200 increase of $17,200 increase of $18,200 increase of $16,200

Answer

Explanation:

Step1: Calculate net income

Net income = Revenues - Expenses. So, $41800 - 23700=18100$.

Step2: Calculate change in retained earnings

Change in retained earnings = Net income - Dividends. So, $18100 - 2900 = 15200$.

Answer:

Increase of $15,200