The following accounts and balances were drawn from the records of Barnes Company:

Based on this information alone the amount of Barnes's retained earnings is:
A)$11,600.
B)$17,200.
C)$5,200.
D)None of these answers is correct.

Question

The following accounts and balances were drawn from the records of Barnes Company:

Based on this information alone the amount of Barnes's retained earnings is:
A)$11,600. 
B)$17,200. 
C)$5,200. 
D)None of these answers is correct.

Quizplus · Accepted Answer

Assets = $4,500 + $2,700 + $10,000 ? $3,200 = $14,000
Assets of $14,000 = Liabilities of $2,800 + Equity
Equity = $11,200
Equity = Common stock of $6,000 + Retained earnings
$11,200 = $6,000 + Retained earnings
Retained Earnings = $5,200

The Following Accounts and Balances Were Drawn from the Records