Question 5. 5. Given the following adjusted trial balance: Debit Credit Cash $78

Question

Question 5. 5. Given the following adjusted trial balance: Debit Credit Cash $781 Accounts receivable 1,049 Inventory 1,562 Prepaid rent 43 Property, plant & equipment 150 Accumulated depreciation 26 Accounts payable 41 Unearned revenue 61 Common stock 103 Retained earnings 3,305 Service revenue 134 Interest revenue 28 Salary expense 80 Travel expense 33 _____ Total $3,698 $3,698 After closing entries have been posted, the balance in retained earnings will be: (Points : 1) $3,256 $3,170 $3,440 $3,354

Explanation / Answer

After the closing entries have been posted, the retained earnings balance will be $ 3,354 as shown below:

Unearned revenue not to be considered as the related service has not been rendered during the accounting period.

$ Opening balance in retained earnings account 3,305 Service revenue +134 Interest revenue +28 Salary expense -80 Travel expense -33 Balance in retained earnings 3,354

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