Problem: Presented below is an adjusted trial balance for Rand Company, at December 31, 2007.
Cash $ 19,700 Accounts payable $ 15,000
Accounts receivable 20,000 Notes payable 9,000
Prepaid insurance 15,000 Accumulated depreciation-
Equipment 35,000 equipment 14,000
Depreciation expense 7,000 Service revenue 30,000
Dividends 5,500 Common stock 15,000
Advertising expense 1,400 Retained earnings 9,000
Rent expense 800 Unearned service revenue 16,000
Salary expense 1,000
Insurance expense 2,600
$108,000 $108,000
Instructions:
Q1. Prepare closing entries for December 31, 2007.
Q2. Determine the balance in the Retained Earnings account after the entries have been posted.