Frosty Inc. has the following balances on December 31 prior to closing entries:

Revenues $ 35,000

Retained Earnings, Jan. 1 10,000

Cash 7,000

Expenses 23,000

Accounts Payable 4,000

Dividends 1,000

Supplies 18,000

Based upon the balances above, what net adjustment would be made to Retained Earnings due to closing entries?

A) Increase of $11,000.

B) Increase of $13,000.

C) Increase of $12,000.

D) Increase of $14,000.

Answer: A

Which of the following is a possible closing entry?

A) Debit Cash, credit Service Revenue.

B) Debit Cash, credit Retained Earnings.

C) Debit Service Revenue, credit Retained Earnings.

D) Debit Dividends, credit Retained Earnings.

Answer: C

The closing entry for expenses includes:

A) A debit to Dividends and a credit to all expense accounts.

B) A debit to Retained Earnings and a credit to all expense accounts.

C) A debit to Revenues and a credit to Retained Earnings.

D) A debit to Revenues and a credit to all expense accounts.

Answer: B

For the first three years of operations, the company reports net income of $1,000, $2,000, and $3,000, and pays dividends of $500, $1,000, and $1,000. What is the balance of retained earnings at the end of the third year?

A) $2,000.

B) $2,500.

C) $3,500.

D) $6,000.

Answer: C

In the first three years of operations, Lindsey Corporation reported net income(loss) of $(150,000), $100,000, and $250,000. At the end of the third year, Lindsey Corporation has a balance of $120,000 in its Retained Earnings account. What is the total amount of dividends Lindsey Corporation paid over the three years?

A) $130,000.

B) $120,000.

C) $80,000.

D) $380,000.

Answer: C

The Retained Earnings account had a beginning credit balance of $26,000. During the period, the business had a net loss $12,000, and the company paid dividends of $8,000. The ending balance in the Retained Earnings account is:

A) $6,000.

B) $30,000.

C) $22,000.

D) $14,000.

Answer: A

The ending Retained Earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. The company declared a dividend of $1.3 million during the year. What was the amount of net income during the year?

A) $1.9 million.

B) $3.2 million.

C) $4.5 million.

D) $1.3 million.

Answer: C