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6 April, 05:44

On February 1, 2019, the balance of the retained earnings account of Blue Power Corporation was $315,000. Revenues for February totaled $61,000, of which $57,500 was collected in cash. Expenses for February totaled $65,000, of which $54,000 was paid in cash. Dividends declared and paid during February were $6,000. Calculate the retained earnings balance on February 28, 2019.

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  1. 6 April, 08:31
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    The retained earnings balance on February 28, 2019 is $305.000.

    Explanation:

    Balance of the retained earnings account on February 1, 2019 = $315,000

    Revenue for February 2019 = $61,000

    Expenses for February 2019 = $65,000

    Dividend declared in February 2019 = $6,000

    Net Income = Revenue - Expenses = 61,000 - 65,000 = - 4,000

    Ending Balance of Retained Earning = Beginning balance of retained earning + net Income - dividend =

    Ending Balance of Retained Earning = $315,000 + (-4000) - $6,000

    Ending Balance of Retained Earning = $305,000

    The retained earnings balance on February 28, 2019 is $305.000.
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