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Loot Company has a beginning retained earnings balance of $6,000. It has the following account balances...

Loot Company has a beginning retained earnings balance of $6,000. It has the following account balances at the end of the first year of operations:

Accounts Payable

$37,000

Revenues

$106,000

Unearned Revenues

$15,000

Salaries Expense

$14,000

Dividends

$8,000

Utilities Expense

$12,000

Accrued Expenses

$13,000

Advertising Expense

$10,000

Prepaid Expenses

$16,000

Short-term Investments

$20,000

Cash

$33,000

Land

$50,000

Common Stock

$53,000

What is the ending balance in Retained Earnings?

Solutions

Expert Solution

Retained Earnings = Beginning Period Retained Earnings + Net Income (Profit/Loss) - Stock dividends Paid - Cash Dividends

Net Income = Revenues - Expenses =Revenues - Salaries Expense - Utilities Expense -Accrued Expenses - Advertising expense - Dividends

= $106,000 - $14000- $12000 - $13000 - $10000

=$57000

Retained Earnings = $6000 + $57000 - $8000

=$ 55000

jeff jeffy answered 3 years ago
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