Question

Required information Use the following information for problem 3 to 5 LO P2 As of December 31, 2019, Armani Company's financial records show the following items and amounts. Cash Accounts receivable Supplies Equipment Accounts payable Common stock Retained earnings, Dec. 31, 2018 Retained earnings, Dec. 31, 2019 Dividends Consulting revenue Rental revenue Salaries expense Rent expense Selling and administrative expenses $11,000 10,000 7,000 6,000 13,000 15,000 4,000 6,000 14,000 35,000 24,000 21,000 13,000 9,000 Problem 1-4A Preparing a statement of retained earnings LO P2 Required: Prepare a year-end statement of retained earnings for Armani Company.

Answer 1

Ans:

ARMANI COMPANY
Statement of Retained Earnings
For Year ended December 31, 2019
	$
Retained earnings, Dec.31, 2018	4,000.00
Add: Net income	16,000.00
	20,000.00
Less: Dividends	14,000.00
Retained earnings, Dec.31, 2019	6,000.00
Explanation
ARMANI COMPANY
Income Statement
For Year ended December 31, 2019
	$	$
Revenues:
Consulting revenue	35,000.00
Rental Revenue	24,000.00
Total Revenues		59,000.00
Expenses:
Rent expense	13,000.00
Salaries expense	21,000.00
Selling & Administrative Expenses	9,000.00
Total expenses		43,000.00
Net income		16,000.00