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Use the adjusted trial balance for Stockton Company to answer the question that follow. Stockton Company Adjusted Trial Balance December 31 Line Item Description Amount Amount Cash 6,185 Accounts Receivable 2,537 Prepaid Expenses 644 Equipment 13,712 Accumulated Depreciation 9,057 Accounts Payable 1,484 Notes Payable 5,457 Common Stock 1,000 Retained Earnings 2,619 Dividends 652 Fees Earned 7,589 Wages Expense 2,055 Rent Expense 896 Utilities Expense 301 Depreciation Expense 158 Miscellaneous Expense 66 Total 27,206 27,206 Determine the retained earnings ending balance. a.$4,113 b.$3,619 c.$27,206 d.$6,080
Use the adjusted trial balance for Stockton Company to answer the question that follow. Stockton Company Adjusted Trial Balance December 31 Line Item Description Amount Amount Cash 6,185 Accounts Receivable 2,537 Prepaid Expenses 644 Equipment 13,712 Accumulated Depreciation 9,057 Accounts Payable 1,484 Notes Payable 5,457 Common Stock 1,000 Retained Earnings 2,619 Dividends 652 Fees Earned 7,589 Wages Expense 2,055 Rent Expense 896 Utilities Expense 301 Depreciation Expense 158 Miscellaneous Expense 66 Total 27,206 27,206 Determine the retained earnings ending balance. a.$4,113 b.$3,619 c.$27,206 d.$6,080
The final sum ofretained earningsis $6,080. Choice D.We must take into account themodificationsto the retained earnings account based on the data supplied in the adjusted trial balance in order to ascertain the retained earnings ending balance for Stockton Company.Dividends are subtracted from the beginning balance of retained earnings before adding nett income (or deducting nett loss) and calculating retained earnings.Here are the pertinent accounts in the adjusted trial balance:Earnings retained: $2,619 (starting balance)Payouts: $652The revenues (Fees Earned) andexpenses(Wages Expense, Rent Expense, Utilities Expense, Depreciation Expense, Miscellaneous Expense) must be taken into account in order to determine the nett income or nett loss.Revenues:Earned Fees: $7,589Expenses:Expense for wages: $2,055Cost of rent: $896Cost of utilities: $301Depreciation Cost: $158.Various Expenses: $66We deduct all costs and revenues from the total to determine the nett income:Nett income is calculated as earned fees minus expenses for wages, rent, utilities, depreciation, and miscellaneous items.Nett Income is $7,589 less ($2,055 plus $896 plus $301 plus $158 + $66).$7,589 - $3,476 is the nett income.Total Revenue: $4,113We can now determine the ending balance of retained earnings:Retained Profits Retained Earnings (Beginning Balance) +Nett Income- Dividends = Ending BalanceEnding Balance of Retained Earnings = $2,619 + $4,113 - $652Retained Earnings Ending Balance = $6,080Therefore, the correct option for the retained earnings ending balance is . $6,080. SO Option D is correct.For more question onretained earningsvisit:brainly.com/question/15175380#SPJ8...