financial accounting how do I calculate the retained earnings for closing entries from a partial adjusted...

financial accounting

how do I calculate the retained earnings for closing entries from a partial adjusted trial balance.

Expert Solution

The net income gets carried over to the statement of retained earnings. We will also use the retained earnings balance from the adjusted trial balance as the beginning balance.

The sequence of the closing process is as follows:

Close the revenue accounts to Income Summary.
Close the expense accounts to Income Summary.
Close Income Summary to Retained Earnings.
Close Dividends to Retained Earnings.

We need to do the closing entries to make them match and zero out the temporary accounts.

Step 1: Close Revenue accounts. Close means to make the balance zero.
Step 2: Close Expense accounts.
Step 3: Close Income Summary account.
Step 4: Close Dividends (or withdrawals) account.

The four basic steps in the closing processare: Closing the revenue accounts—transferring the credit balances in the revenue accounts to a clearing account called Income Summary. Closing the expense accounts—transferring the debit balances in the expense accounts to a clearing account called Income Summary.

ekkarill92 answered 5 months ago

What is the ending balance in Retained Earnings after the closing entries are completed?

The following accounts and balances are taken from Moore Company's adjusted trial balance:Accounts Payable$10,000Accounts Receivable3,000Accumulated Depreciation1,800Depreciation Expense1,600Dividends2,000Insurance Expense2,300Interest Revenue1,340Prepaid Insurance2,320Retained Earnings10,100Salary Expense25,100Service Revenue37,800What is the ending balance in Retained Earnings after the closing entries are completed?A) $8,140B) $10,140C) $18,240D) $39,140

Closing entries reset the balance in retained earnings to zero. (True or False)

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