How do i find the retained earnings? What is the formula to find retained earnin

ID: 2505230 • Letter: H

Question

How do i find the retained earnings? What is the formula to find retained earnings? What is the retained earnings?

Accounts payable $ 5,000 Notes payable $ 7,000

Accounts receivable 2,000 Rent expense 10,000

Advertising expense 4,000 Retained earnings?

Cash 3,100 Service revenue 25,000

Common stock 15,000 Supplies 1,900

Dividends 2,500 Supplies expense 1,700

Equipment 26,800 Net Income 9,300

INCOME STATEMENT

SERVICE REVENUE = 25000

LESS:-RENT EXPENSE = (10000)

LESS:-ADVERTISING EXPENSE = (4000)

LESS:-SUPPLIES EXPENSE = (1700)

PROFIT = 9300

LESS:DIVIDEND PAID = (2500)

PROFIT TRANSFERRED TO RETAINED EARNINGS = 6800

RETAINED EARNINGS ARE THE UNDISTRIBUTED PROFIT OF THE COMPANY FOR A FINANCIAL YEAR THAT IS RE-INVESTED IN THE COMPANY .

ONE MORE WAY TO FIND RETAINED EARNINGS:-

BALANCE SHEET

ASSETS = ACCOUNTS RECIEVABLE + CASH + SUPPLIES + EQIPMENT

=2000+3100+1900+26800

=33800

ASSETS = LIABILITIES

LIABILITIES = ACCOUNT PAYABLE + NOTES PAYABLE + COMMON STOCK + RETAINED EARNIGS

33800=5000+7000+15000 + RETAINED EARNINGS

RETAINED EARNINGS = 6800

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