As of December 31, Year 1, Flowers Company had total assets of $220,000, total liabilities of $66,000, and common stock of $110,000. The company's Year 1 income statement contained revenue of $40,000 and expenses of $23,000. The Year 1 statement of changes in stockholders' equity stated that $3,200 of dividends were paid to investors. Required a. Determine the before-closing balance in the Retained Earnings account on December 31, Year 1. b. Determine the after-closing balance in the Retained Earnings account on December 31, Year 1. c. Determine the before-closing balances in the Revenue, Expense, and Dividend accounts on December 31, Year 1. d. Determine the after-closing balances in the Revenue, Expense, and Dividend accounts on December 31, Year 1.

(b) After-closing balance in the Retained Earnings account on December 31, Year 1,

Total Stockholder's equity = Total assets - Total liabilities

= $220,000 - $66,000

= $154,000

After-closing balance of Retained Earnings = Total Stockholder's equity - Common stock

= $154,000 - $110,000

= $44,000

(a) Before-closing balance in the Retained Earnings account on December 31, Year 1.

Net Income = Revenue - Expenses

= $40,000 - $23,000

= $17,000

Before-closing balance of Retained Earnings:

= After-closing balance of Retained Earnings + Dividend paid - Net Income

= $44,000 + $3,200 - $17,000

= $30,200

(c) Before-closing balances in the following accounts:

Revenue = $40,000

Expenses = $23,000

Dividend = $3,200

(d) After-closing balances in the following accounts:

Revenue = $0

Expenses = $0

Dividend = $0

Because revenue and expenses are transferred to income statement and dividend are transferred to retained earnings.