Question

Prior to closing the accounts, Syracuse Company's accounting records showed the following balances:

Retained earnings	$	6,500
Service revenue		7,850
Interest revenue		900
Salaries expense		4,700
Operating expense		1,450
Interest expense		600
Dividends		1,200

After closing the accounts, what is the balance of the Retained Earnings account?

rev: 07_02_2020_QC_CS-215398

Multiple Choice

• $6,500.

• $7,300.

• $8,500.

• $9,700.

Answer 1

Income statement

Revenues:
Service revenue	7,850
Interest revenue	900
Total revenues		8,750
Expenses:
Salaries expense	4,700
Operating expense	1,450
Interest expense	600
Total expenses		- 6,750
Net income		$2,000

Statement of Retained Earnings

Retained Earnings, beginning	6,500
Net income	2,000
	8,500
Dividends	- 1,200
Retained Earnings, ending	$7,300

After closing the accounts, balance of the Retained Earnings account = $7,300

Second option is correct.