Partial adjusted account balance data for Swifty Corporation at December 31, 2017, includes the following accounts: Retained Earnings $17,000, Dividends $5,500, Service Revenue $36,300, Salaries and Wages Expense $14,700, Insurance Expense $1,830, Rent Expense $3,810, Supplies Expense $1,410, and Depreciation Expense $800. The balance in Retained Earnings is the balance as of January 1. Prepare a retained earnings statement for the year assuming net income is $15,787.

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anthougo anthougo · Answer 1 · 2020-10-01T19:27:27+02:00

Answer:

Swifty Corporation

Retained Earnings Statement for the year ended December 31, 2017:

Net Income $15,787

Retained Earnings, January 1, 2017 17,000

Less Dividends (5,500)

Retained Earnings, Dec. 31, 2017 $27,287

Explanation:

a) Data and Calculation:

Service Revenue $36,300

less expenses:

Salaries and Wages Expense $14,700

Insurance Expense 1,830

Rent Expense 3,810

Supplies Expense 1,410

Depreciation Expense 800

Total expenses $22,550

Net income is supposed to be $13,750 and not $15,787.

The Retained Earnings Statement is prepared with the given net income of $15,787. It shows the movement in earnings and distribution to stockholders.