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Chapter 4: Q2SE (page 217)

Refer to the data in Short Exercise S4-1. Prepare Dalton鈥檚 statement of retained earnings for the year ended December 31, 2018.

Short Answer

Expert verified

Statement of retained earnings is shown as follows:

DALTON HAIR STYLISTS

Statement of Retained Earnings

Year Ended December 31, 2018

Retained Earnings, January 1, 2018

$0

Net income for the year

4,550

4,550

Dividends

(1,400)

Retained Earnings, December 31, 2018

$3,150

Step by step solution

01

Explanation on the statement of retained earnings

Statement of retained earnings represents the net change in the retained earnings due to income and dividend.

02

Explanation on change in retained earnings

The beginning balance of the retained earnings equals $0, and the ending balance of retained earnings equals $3,150. Net income of $4,550 is added and dividends of $1,400 is subtracted from the beginning balance of retained earnings, to estimate ending balance of retained earnings.

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Most popular questions from this chapter

The following balances appear on the books of Sarah Simmons Enterprises: Retained Earnings, \(29,600; Dividends, \)10,500; Income Summary, \(0; Service Revenue, \)24,500; Salaries Expense, \(6,200; Rent Expense, \)3,500; and Advertising Expense, $2,000. All accounts have normal balances. Requirements 1. Open a T-account for each account, and insert its adjusted balance as given (denote as Adj. Bal.) at December 31. 2. Post the closing entries to the accounts, denoting posted amounts as Clos. 3. Compute the ending balance of Retained Earnings.

E4-20 Preparing financial statements from the completed worksheet Use your answer from Exercise E4-19 to prepare Data Solution鈥檚 financial statements. Requirements 1. Complete the income statement for the month ended November 30, 2018. 2. Complete the statement of retained earnings for the month ended November 30, 2018. Assume beginning Retained Earnings was $0. 3. Complete the classified balance sheet as of November 30, 2018. Use the report form.

What are temporary accounts? Are temporary accounts closed in the closing process?

For each account listed, identify whether the account would appear on the post-closing trial balance. Indicate either yes or no.

17. Service Revenue

List the steps of the accounting cycle.
See all solutions

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