* $41,500 = $43,100 + $13,000 (which is net income) - $14,600
Net income = $50,500 - $4,900 - $5,200 - $18,000 - $9,400 = $13,000
Diff: 3 Type: ES
L.O.: 1-2
CPA COMPETENCIES: Chapter 1
1.1.1 Evaluates financial reporting needs
1.1.2 Evaluates the appropriateness of the basis of financial reporting
1.1.3 Evaluates reporting processes to suppport reliable financial reporting
94) Tall Tree Ltd. gathered together the following information regarding the asset, liability, shareholders' equity, revenue, and expense accounts as of the end of its first year in operation, May 31, 2017:
Accounts payable $9,600 Rent expense $6,500
Accounts receivable 3,200 Salary expense 19,400
Cash 13,800 Salary payable 1,300
Common shares 15,000 Service revenue 45,500
Dividends 8,300 Supplies 2,500
Interest expense 1,200 Truck 34,600
Note payable 21,000 Utilities expense 5,000
Prepare the Statement of Retained Earnings for Tall Tree Ltd. for the year ended May 31, 2017.
Answer: Tall Tree Ltd.
Statement of Retained Earnings
For the Year Ended May 31, 2017
Retained earnings, June 1, 2016 $0
Add: Net income 13,400
13,400
Deduct: Dividends