The Retained Earnings Balance as of the Ending of the Year, December 31, 20XX is $23,900
What is net income?
The net income is the excess of fees earned by Adventure Travel in the year ended over its total expenses, in essence, we need to determine its total expenses first and foremost, which comprises of salaries expense, rent expense, depreciation expense, advertising expense and office supplies expense
total expenses=32,800+16,800+3960+4000+2800
total expenses=60,360
fees earned=75,000
net income =fees earned-total expenses
net income=75,000-60,360
net income=$14,640
Now the closing retained earnings comprises of beginning retained earnings plus the net income minus the cash dividends paid
Retained earnings=$14,640+$ 10,260-$1,000
Retained earnings=$23,900
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