The following information is available for the Higgins Travel Agency.After closing entries are posted,what will be the balance in the Retained earnings account?
A)$75,500.
B)$184,500.
C)$99,500.
D)$160,500.
E)$130,000.

Question

The following information is available for the Higgins Travel Agency.After closing entries are posted,what will be the balance in the Retained earnings account? 
A)$75,500. 
B)$184,500. 
C)$99,500. 
D)$160,500. 
E)$130,000.

Quizplus · Accepted Answer

The closing entries indicate that total revenues were $403,000 and total expenses were $242,500, resulting in net income of $160,500. Since the Retained earnings account accumulates all net income and losses over the company's history, the balance in the Retained earnings account after closing entries will be equal to the net income of $160,500. Therefore, the correct answer is D) $160,500.

The Following Information Is Available for the Higgins Travel Agency