1. Royce Company’s accounting records show an after-closing balance of $9,700 in its Retained Earnings account on December 31, During the 2016 accounting cycle, Royce earned $7,550 of revenue, incurred $4,600 of expense, and paid $750 of dividends. Revenues and expenses were recognized evenly throughout the accounting period.
Required:
a. Determine the balance in the Retained Earnings account as of January 1, 2017.
b. Determine the balance in the temporary accounts as of January 1, 2016.
c. Determine the after-closing balance in the Retained Earnings account as of December 31, 2015.
d. Determine the balance in the Retained Earnings account as of June 30, 2016.
In this exercise, we will determine the balance in the retained earnings account as of January 1, Year 2 and the balance in the temporary accounts as of January 1, Year 1. We will also determine the after-closing balance in the retained earnings account as of December 31, 2015 and the balance in the retained earnings account as of June 30, 2016, with the given information.