During 2020, Harris Inc. reported revenues of $237,000 and expenses of $130,000, and declared cash dividends...

During 2020, Harris Inc. reported revenues of $237,000 and expenses of $130,000, and declared cash dividends of $65,000. Retained Earnings on December 31, 2019 was $165,000. Required: Prepare closing journal entries as at December 31, 2020; show your journal entries. Calculate the balance in Retained Earnings on December 31, 2020. Please show your work.

(use appendix to solve)

Expert Solution

Revenues = $237,000

Expenses = $130,000

Cash dividends = $65,000

Retained earnings, beginning = $165,000

Net income = Revenues - Expenses

= 237,000-130,000

= $107,000

Date	General Journal	Debit	Credit
Dec-31	Revenues	$237,000
	Income Summary		$237,000
	( To close revenues)
Dec-31	Income Summary	$130,000
	Expenses		$130,000
	( To close expenses)
Dec-31	Income Summary	$107,000
	Retained earnings		$107,000
	( To close income summary)
Dec-31	Retained earnings	$65,000
	Dividend payable		$65,000
	( To close dividends)

Statement of Retained Earnings
Beginning retained earnings	165,000
Net Income	107,000
	$272,000
Dividends	-65,000
Retained earnings, Ending	$207,000

The balance in Retained Earnings on December 31, 2020 = $207,000

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ekkarill92 answered 3 years ago

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