Windsor, inc. compiled the following financial information as of december 31, 2022:
service revenue $1151000
common stock 245000
equipment 317000
salaries and wages expense 366000
rent expense 91500
depreciation expense 457500
cash 282000
dividends 85000
supplies 45000
accounts payable 175000
accounts receivable 102000
retained earnings, 1/1/22 584000

windsor's retained earnings balance at december 31, 2022 is:
a. $960,000.
b. $640,000
c. $840,000
d.$880,000

The ending retained earning balance is $735,000

Explanation:

For computing the ending balance of retained earnings, first we have to compute the net income or net loss which is shown below:

Net income = Service revenue  - Salaries and wages expense - Rent expense - Depreciation expense

= $1,151,000 - $366,000 - $91,500 0 $457,500

= $236,000

Now The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

= $584,000 + $236,000 - $85,000

= $735,000

government control and resources

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