Question

Kincaid Company's Retained Earnings balance on January 1 was $9,000. During the current year, Kincaid earned $3,100 in revenues and incurred $4,300 in expenses. Kincaid declared and paid $3,000 in dividends, all in cash. After the closing entries are made, Kincaid's Retained Earnings balance on December 31 will be:

A) $7,800.
B) $9,100.
C) $9,000.
D) $4,800.

Answer 1

Answer:

D) $4,800

Explanation:

Previous Retained Earnings + Revenue - Expenses - Dividends = Current Retained Earnings

Old Retained Earnings - $9,000

Revenue                 -  $3,100

Expenses                - ($4,300)

Dividends               -  ($3,000)

Current Retained Earnings  = $4,800