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21 August, 23:13

The adjusted trial balance of Warbocks Corporation at December 31, 2017 includes the following accounts: Retained Earnings $12,600; Dividends $5,000; Service Revenue $30,000; Salaries and Wages Expense $15,000; Insurance Expense $2,000; Rent Expense $4,500; Supplies Expense $500; and Depreciation Expense $1,000. Prepare a retained earnings statement for the year.

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  1. 21 August, 23:17
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    Warbocks Corporation

    Statement of retained earnings for the year ended December 31, 2017

    Amount in $

    Opening retained earnings 12,600

    Net income for the year 7,000

    Dividend (5,000)

    Closing retained earnings 14,600

    Explanation:

    The retained earnings statement shows the movement in the retained earnings balance between the start and end of the year.

    This includes the net earnings and dividend paid during the year.

    Net income = $30,000 - $15,000 - $2,000 - $4,500 - $500 - $1,000

    = $7,000
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