An adjusted trial balance is given below. $$\begin{array} { | l | r | r | }
\hline & { \text { Debit } } & \text { Credit } \
\hline \text { Cash } & \$ 13,000 & \
\hline \text { Accounts Receivable } & 2,000 & \
\hline \text { Prepaid Rent } & 700 & \
\hline \text { Merchandise Inventory } & 25,000 & \
\hline \text { Accounts Payable } & & \$ 4,100 \
\hline \text { Salaries Payable } & & 2,000 \
\hline \text { Notes Payable } & & 800 \
\hline \text { Common Stock } & & 8,000 \
\hline \text { Retained Earnings } & & 3,800 \
\hline \text { Dividends } &1,000 & \
\hline \text { Sales Revenue } & &86,900 \
\hline \text { Cost of Goods Sold } & 23,000 & \
\hline \text { Salaries Expense } &18,000 & \
\hline \text { Rent Expense } & 12,000 & \
\hline \text { Selling Expense } & 8,500 & \
\hline \text { Delivery Expense } & 1,800& \
\hline \text { Supplies Expense } & \underline { 600 } \
\hline \text { Total } & \$ 105,600 & \$ 105,600 \
\hline
\end{array}$$ What will be the final balance in the corporation's Retained Earnings account after recording the closing
Entries?
A) $25,800
B) $26,800
C) $14,000
D) $2,800

Question

An adjusted trial balance is given below. $$\begin{array} { | l | r | r | } 
\hline &  { \text { Debit } } & \text { Credit } \
\hline \text { Cash } & \$ 13,000 & \
\hline \text { Accounts Receivable } & 2,000 & \
\hline \text { Prepaid Rent } & 700 & \
\hline \text { Merchandise Inventory } & 25,000 & \
\hline \text { Accounts Payable } & & \$ 4,100 \
\hline \text { Salaries Payable } & & 2,000 \
\hline \text { Notes Payable } & & 800 \
\hline \text { Common Stock } & & 8,000 \
\hline \text { Retained Earnings } &  & 3,800 \
\hline \text { Dividends } &1,000 &  \ 
\hline \text { Sales Revenue } &  &86,900 \
\hline \text { Cost of Goods Sold } & 23,000 & \
\hline \text { Salaries Expense } &18,000  & \
\hline \text { Rent Expense } & 12,000 & \
\hline \text { Selling Expense } & 8,500 & \
\hline \text { Delivery Expense } & 1,800& \
\hline \text { Supplies Expense } & \underline { 600 }  \
\hline \text { Total } & \$ 105,600 & \$ 105,600 \
\hline
\end{array}$$ What will be the final balance in the corporation's Retained Earnings account after recording the closing
Entries?
A) $25,800
B) $26,800
C) $14,000
D) $2,800

Quizplus · Accepted Answer

The correct answer is A.The closing entries will transfer the balances of the revenue and expense accounts to the Retained Earnings account. The total revenue is $86,900 and the total expenses are $63,900 ($23,000 + $18,000 + $12,000 + $8,500 + $1,800 + $600). Therefore, the net income is $23,000 ($86,900 - $63,900). The net income will be added to the Retained Earnings account, which has a beginning balance of $3,800. Therefore, the final balance in the Retained Earnings account will be $26,800 ($3,800 + $23,000).

An Adjusted Trial Balance Is Given Below What Will Be the Final Balance in the Corporation's Retained