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The following accounts and balances were drawn from the records of Carolina Company on December 31,2016:

-The amount of Carolina's retained earnings after closing on December 31,2016 was:
A)$5,900.
B)$7,200.
C)$3,900.
D)$4,900.

Question

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The following accounts and balances were drawn from the records of Carolina Company on December 31,2016:
 
-The amount of Carolina's retained earnings after closing on December 31,2016 was:
A)$5,900. 
B)$7,200. 
C)$3,900. 
D)$4,900.

Quizplus · Accepted Answer

To calculate the amount of retained earnings after closing on December 31, 2016, we need to subtract the total of expenses and dividends from the total revenues.

Total Revenues = $26,500
Total Expenses = $16,200
Total Dividends = $5,400

Retained Earnings = Total Revenues - Total Expenses - Total Dividends
Retained Earnings = $26,500 - $16,200 - $5,400
Retained Earnings = $4,900

Therefore, the amount of Carolina's retained earnings after closing on December 31, 2016 was $4,900. The correct answer is D.

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