Question

The following information is available for Oriole Company

Accounts receivable $3,500 Cash $6,360
Accounts payable 3,700 Supplies 3,720
Interest payable 530 Unearned service revenue 820
Salaries and wages expense 5,400 Service revenue 43,700
Notes payable 31,000 Salaries and wages payable 780
Common stock 55,400 Depreciation expense 600
Inventory 2,970 Equipment (net) 109,200

Required:
What is the retained earnings?

Answer 1

Answer:  $33,520

Explanation:

Assets = Equity + Liability

Assets = Retained earnings + Common Stock + Liability - because equity is made up of common stock and retained earnings

Retained earnings = Assets - Common Stock - Liability

Assets;

=  Accounts receivable + Supplies +  Cash + Inventory + Equipment (net)

= 3,500 + 3,720 + 6,360 + 2,970 + 109,200

= $‭125,750‬

Liabilities;

= Accounts payable + Interest payable + Unearned service revenue + Notes payable + Salaries and wages payable

= 3,700 + 530 + 820 + 31,000 + 780

= $36,830

Retained earnings = Assets - Common Stock - Liability

= ‭125,750‬ - 55,400 - 36,830

= $33,520