Figgaro Company's accounts and their balances, as of the end of August, are included below. All accounts have normal balances: Accounts receivable…..$36,000?Cash…………………….$27,000Equipment……………..59,000?Advertising expense…5,000Service revenues earned.75,000?Accounts payable………31,000Rent expense…………..3,600?Dividends..24,000Office supplies………1,500?Salaries expense………..30,000Notes payable…………22,000?Common Stock…….. 58,100a. Calculate net income.b. Determine the amount of retained earnings to be shown on the August 31 balance sheet.
What will be an ideal response?
| A. $75,000 | Service revenues earned |
| (3,600) | Rent expense |
| (5,000) | Advertising expense |
| (30,000) | Salaries expense |
| $36,400 | Net income |
| B. $ 0 | Retained Earnings (beginning) |
| 36,400 | Net income |
| (24,000) | Dividends |
| $ 12,400 | Retained Earnings (ending) |
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