The following account balances appear in the 2021 adjusted trial balance of Blue Devils Corporation: Cash, $5,000; Accounts Receivable, $9,000; Supplies, $19,000; Equipment, $120,000; Accumulated Depreciation, $45,000; Accounts Payable, $26,000; Salaries Payable, $16,000; Common Stock, $60,000; and Retained Earnings, How can I calculate my retained earnings for this problem?

Question

Business

Jocelyn Mcknight

16 May, 11:20

The following account balances appear in the 2021 adjusted trial balance of Blue Devils Corporation: Cash, $5,000; Accounts Receivable, $9,000; Supplies, $19,000; Equipment, $120,000; Accumulated Depreciation, $45,000; Accounts Payable, $26,000; Salaries Payable, $16,000; Common Stock, $60,000; and Retained Earnings, How can I calculate my retained earnings for this problem?

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Answers (1)

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Tanya Miles · Answer 1

Retained earnings is $6,000

Explanation:

Total Asset of Blue Devils Corporation = Cash + Accounts Receivable + Supplies + Equipment - Accumulated Depreciation = $5,000 + $9,000 + $19,000 + $120,000 - $45,000 = $108,000

Basing on Accounting Equation:

Total Asset = Total Liabilities + Total Equity = $108,000

Total Liabilities = Accounts Payable + Salaries Payable = $26,000 + $16,000 = $42,000

Total Equity = Total Asset - Total Liabilities = $108,000 - $42,000 = $66,000

Retained Earnings = Total Equity - Common Stock = $66,000 - $60,000 = $6,000