cash $900 accounts receivable 1,200 inventory 2,000 supplies 1,800 prepaid rent 600 land 6,200 building…

cash $900 accounts receivable 1,200 inventory 2,000 supplies 1,800 prepaid rent 600 land 6,200 building 39,300 accumulated depreciation—building $8,400 accounts payable 7,900 unearned revenue 4,200 notes payable, due 2028 2,100 common stock 6,800 retained earnings 3,100 dividends 900 service revenue 32,600 rent expense 1,500 supplies expense 1,100 salaries expense 6,300 depreciation expense—building 1,500 utilities expense 1,800 totals $65,100 $65,100 what is the retained earnings balance at december 31, 2025?

cash $900 accounts receivable 1,200 inventory 2,000 supplies 1,800 prepaid rent 600 land 6,200 building 39,300 accumulated depreciation—building $8,400 accounts payable 7,900 unearned revenue 4,200 notes payable, due 2028 2,100 common stock 6,800 retained earnings 3,100 dividends 900 service revenue 32,600 rent expense 1,500 supplies expense 1,100 salaries expense 6,300 depreciation expense—building 1,500 utilities expense 1,800 totals $65,100 $65,100 what is the retained earnings balance at december 31, 2025?

Answer

Explanation:

Step1: Recall retained - earnings formula

Retained Earnings Ending = Retained Earnings Beginning+Net Income - Dividends. First, calculate net income. Net Income = Service Revenue - (Rent Expense+Supplies Expense+Salaries Expense+Depreciation Expense - Building+Utilities Expense).

Step2: Calculate net income

Service Revenue = $32,600$, Rent Expense = $1,500$, Supplies Expense = $1,100$, Salaries Expense = $6,300$, Depreciation Expense - Building = $1,500$, Utilities Expense = $1,800$. Net Income=$32600-(1500 + 1100+6300+1500+1800)$ Net Income=$32600 - 12200$ Net Income = $20,400$.

Step3: Calculate ending retained earnings

Retained Earnings Beginning = $3,100$, Dividends = $900$, Net Income = $20,400$. Retained Earnings Ending=$3100 + 20400-900$ Retained Earnings Ending=$22,600$.

Answer:

$22,600$