Question

The following accounts and balances are taken from Moore Company's adjusted trial balance:

Accounts Payable	$10,000
Accounts Receivable	3,000
Accumulated Depreciation	1,800
Depreciation Expense	1,600
Dividends	2,000
Insurance Expense	2,300
Interest Revenue	1,340
Prepaid Insurance	2,320
Retained Earnings	10,100
Salary Expense	25,100
Service Revenue	37,800

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

A) $8,140

B) $10,140

C) $18,240

D) $39,140

Answer 1

Answer is c , Ending balance in retained earning after the closing entries are completed will be $ 18240

because it is calculated as follow

CALCULATION OF NET INCOME
SERVICE REVENUE	37800
ADD:
INTEREST REVENUE	1340
TOTAL INCOME	39140
LESS:
DEPRECIATION EXPENSE	1600
INSURANCE EXPENSE	2300
SALARY EXPENSE	25100
TOTAL EXPENSE	29000
NET INCOME=TOTAL INCOME-TOTAL EXPENSE	10140
CALCULATION OF CLOSING RETAINED EARNINGS
RETAINED EARNING OPENING	10100
ADD: NET INCOME	10140
LESS: DIVIDEND	2000
RETAINED EARNINGS CLOSING	18240