Answer:
c. The ending Retained Earnings on the balance sheet is $100,000.
Explanation:
Cash Account Receivable Retained Earning
Opening Balance $10,000 $25,000 $35,000
Services $75,000 $75,000
Collection $70,000 - $70,000
Salary payment - $21,000 - $21,000
Accrued Expense - $4,000
$59,000 $30,000 $85,000
Net Income = 75,000 - 21,000 - 4,000 = $50,000
All the option are incorrect according to given data.
* Data Provided in this question is inconsistent with the option given. Same question is attached with this answer and following answer is made according to that. Pleas find the attached file.
Solution Based on data of attached question:
Cash Account Receivable Retained Earning
Opening Balance $20,000 $50,000 $70,000
Services $150,000 $150,000
Collection $140,000 - $140,000
Salary payment - $42,000 - $42,000
Accrued Expense - $8,000
$118,000 $60,000 $170,000
Net Income = 150,000 - 42,000 - 8,000 = 100,000
