Question 8 (of 8) 8. value: 10.00 points Exercise 1-23A Retained earnings and th

Question

Question 8 (of 8) 8. value: 10.00 points Exercise 1-23A Retained earnings and the closing process LO 1-7 As of December 31, 2016, Flowers Company had total assets of $130,000, total liabilities of $50,000, and common stock of $70,000. The company's 2016 income statement contained revenue of $30,000 and expenses of $18,000. The 2016 statement of changes in stockholders' equity stated that $3,000 of dividends were paid to investors. Required a. Determine the before-closing balance in the Retained Eamings account on December 31, 2016. Retained earnings before- b. Determine the after-closing balance in the Retained Eamings account on December 31, 2016. Retained earnings after-closing nd accounts on December

Explanation / Answer

Retained earning before closing = Total assets-total liabilities-common stock

= 130000-50000-70000

Retained earning before closing = 10000

Retained earnings after closing = Beginning retained earnings+net income-dividends

= 10000+12000-3000

Retained earnings after closing = 19000

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