Question

At the beginning of April, Owl Corporation has a balance of $12,000 in the Retained Earnings account. During the month of April, Owl had the following external transactions.


1. Issue common stock for cash, $8,000.
2. Provide services to customers on account, $6,100.
3. Provide services to customers in exchange for cash, $2,400.
4. Purchase equipment and pay cash, $5,600.
5. Pay rent for April, $1,000.
6. Pay workers' salaries for April, $2,500.
7. Pay dividends to stockholders, $1,100.

Using the external transactions above, compute the balance of Retained Earnings at April 30

Answer 1

please I hope you can explain it to me to where I can understand it because I am extremely lost

Answer 2

these are your transactions; except for dividends which I believe count the same as withdrawals

Answer 3

retained earnings tho are what you put back into the business, which there is nothing here to determine that that i can see

Answer 4

how do you find the net income?

Answer 5

you write up a balance sheet

Answer 6

or rather one of those financial papers

Answer 7

net income is after taxes right?

Answer 8

Profit - taxes = what you keep

Answer 9

because I no end retained earnings = beginning retained earnings + net income - dividends

Answer 10

net income = revenue - expenses; was there any cash in the cash account beforehand?

Answer 11

common stock: 8000 cash: 8000 5600
2400 1000
2500
1100
-----------
10400 10200
+200

equip: 5600 notes recv: 6100


revenue: 6100
2400
-------
8500


rent: 1000
wages: 2500
dividends: 1100
-------
4600
-------------------------------

8500
-4600
------
3900 - gross profits

Answer 12

i think dividend are after taxes tho, but since there aint no taxes above it really doesnt matter

Answer 13

as far as i can tell, you have 3900 to put into retained earnings if need be

Answer 14

im gonna pull up my accounting work if its still on me facebook

Answer 15

i guess someone broke the facebook