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Given the following adjusted trial balance:


Debit Credit
Cash $931
Accounts receivable 1175
Inventory 1749
Prepaid rent 48
Equipment
170
Accumulated depreciation-equipment
$29
Accounts payable 46
Unearned service revenue
68
Common stock 120
Retained earnings 3700
Service revenue 206
Interest revenue 31
Salaries and wages expense
90
Travel expense 37
Total $4200 $4200

After closing entries have been posted, the balance in retained earnings will be:

Respuesta :

Answer:

The balance in retained earnings will be $3,810

Explanation:

For computing the ending balance of the retained earning, first, we have to compute the net income

So, the net income would be equal to

= Service revenue + interest revenue - Salaries and wages expense - Travel expense

= $206 + $31 - $90 - $37

= $110

Now we can find out the ending balance of retained earnings. It is shown below:

= Beginning retained earning balance + net income - dividend paid

= $3,700 + $110 - $0

= $3,810

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