From the following information,determine the ending balance in Retained Earnings.
$\begin{array} { l l }
\text { 1. Faginning Retained Eamings } & \$ 6,200 \
\text { 2. Cash } & 1,900 \
\text { 3. Acrounts Payzble } & 1,100 \
\text { 4. Sales } & 27,000 \
\text { 5. Merchandise Inventory } & 9,200 \
\text { 6. Cost of Goods Sold } & 14,400 \
\text { 7. Salary Experse } & 9,900
\end{array}$
A)$ 6,200
B)$ 8,900
C)$12,700
D)$18,900
E)$20,000

Question

From the following information,determine the ending balance in Retained Earnings. 
$\begin{array} { l l } 
\text { 1. Faginning Retained Eamings } & \$ 6,200 \
\text { 2. Cash } & 1,900 \
\text { 3. Acrounts Payzble } & 1,100 \
\text { 4. Sales } & 27,000 \
\text { 5. Merchandise Inventory } & 9,200 \
\text { 6. Cost of Goods Sold } & 14,400 \
\text { 7. Salary Experse } & 9,900
\end{array}$
A)$ 6,200
B)$ 8,900
C)$12,700
D)$18,900
E)$20,000

Quizplus · Accepted Answer

To calculate the ending balance in Retained Earnings, start with the beginning balance and adjust for net income or loss. Net income is calculated as Sales - Cost of Goods Sold - Salary Expense = $27,000 - $14,400 - $9,900 = $2,700. Add this to the beginning Retained Earnings of $6,200 for an ending balance of $8,900.

From the Following Information,determine the Ending Balance in Retained Earnings