A summary of selected ledger accounts appears below for Solomon's Electrical Services for the current calendar year-end. The balance in retained earnings that will appear on the financial statements is
A) $62,000
B) $57,000
C) $205,500
D) $85,500

Question

A summary of selected ledger accounts appears below for Solomon's Electrical Services for the current calendar year-end.  ​ The balance in retained earnings that will appear on the financial statements is
A) $62,000 
B) $57,000 
C) $205,500 
D) $85,500

Quizplus · Accepted Answer

To find the balance in retained earnings, we need to subtract the total expenses and dividends paid from the total revenues. 
Total Revenues: $420,000 
Total Expenses: $320,000 
Dividends Paid: $14,500 
Therefore, Retained Earnings = Total Revenues - Total Expenses - Dividends Paid 
Retained Earnings = $420,000 - $320,000 - $14,500 = $85,500 
Hence, choice D is the correct answer.

A Summary of Selected Ledger Accounts Appears Below for Solomon's