Question

If service revenue is​ $260,000, total expenses are​ $175,000, additional capital stock issued of​ $13,000 and dividends declared are​ $4,000, what is the change in retained earnings as a result of the closing​ process?

Answer 1

Answer:

Increase by $81,000

Explanation:

Data provided in the question:

Service revenue = ​ $260,000

Total expenses = ​ $175,000

Additional capital stock issued =​ $13,000

Dividends declared =​ $4,000

Now,

The change in retained earnings = Revenue - Expenses - Dividends declared

= $260,000 - $175,000 - $4,000

= $81,000

Hence,

Increase by $81,000