On December 31, 2016, Ditka Inc. had Retained Earnings of $283,800 before its cl

Question

On December 31, 2016, Ditka Inc. had Retained Earnings of $283,800 before its closing entries were prepared and posted. During 2016, the company had service revenue of $184,100 and interest revenue of $89,300. The company used supplies in the amount of $95,900, advertising expenses were $18,000, salaries and wages totaled $20,700, and income tax expense was calculated as $16,900. During the year, the company declared and paid dividends of $7,600.

Prepare T-account for the Retained Earnings account.

Explanation / Answer

Ditka Inc. Ledgers for year 2016 Retained Eerning Account Dr Cr Particulars Amt $ Particulars Amt $ Opening Balance 283800 Transferred from Income statement 114300 Closing Balance carried forward 398100 398100 398100 Income Statement (Profit and Loss Account) Dr Cr Particulars Amt $ Particulars Amt $ Supplies Used 95900 Service Revenue 184100 Advertising Expense 18000 Interest Revenue 89300 Salaries & Wages 20700 Income tax expense 16900 Dividend Paid 7600 Transferred to Retained Earning A/c 114300 273400 273400

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