Question

Use the below information to answer the question. Partial List of Accounts A/P = 50,000 A/R...

Use the below information to answer the question.

Partial List of Accounts
A/P = 50,000
A/R = 600,000
Accumulated Depreciation = 45,000
Unearned Revenue = 33,000
Cost of Goods Sold = 9,000,000
Gain on Equipment (Sale) = 13,000
Interest Expense = 87,000
Inventory = 60,000
Loss on Equipment = 70,000
Property, Plant, & Equipment = 300,000
Sales = 11,555,000
Utilities Expense = 95,000

What will be the second number in the amount closed into
retained earnings? Will you debit or credit retained earnings (net amount)?

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Homework Answers

Answer #1
Second number closed into retained earnings is = Net Income
Net Income = Revenues - Expenses
Revenues = Sales + Gain on sale of equipment
Revenue is = (11555000+13000) = $ 11,568,000/.
Expenses = Cost of goods sold + Interest expense + Utilities expense + Loss on sale of equipment
Expenses = (9000000+87000+95000+70000)
Expenses = $ 9,252,000/.
Net Income is = (11568000-9252000)
Net Income is = $ 2,316,000/.
It is Credit to Retained earnings
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