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15 July, 09:06

If service revenue is $260,000, total expenses are $175,000, additional capital stock issued of $13,000 and dividends declared are $4,000, what is the change in retained earnings as a result of the closing process?

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  1. 15 July, 09:21
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    Increase by $81,000

    Explanation:

    Data provided in the question:

    Service revenue = $260,000

    Total expenses = $175,000

    Additional capital stock issued = $13,000

    Dividends declared = $4,000

    Now,

    The change in retained earnings = Revenue - Expenses - Dividends declared

    = $260,000 - $175,000 - $4,000

    = $81,000

    Hence,

    Increase by $81,000
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