Given the following adjusted trial balance:

Debit Credit

Cash $931

Accounts receivable 1175

Inventory 1749

Prepaid rent 48

Equipment

170

Accumulated depreciation-equipment

$29

Accounts payable 46

Unearned service revenue

68

Common stock 120

Retained earnings 3700

Service revenue 206

Interest revenue 31

Salaries and wages expense

90

Travel expense 37

Total $4200 $4200

After closing entries have been posted, the balance in retained earnings will be:

The balance in retained earnings will be $3,810

Explanation:

For computing the ending balance of the retained earning, first, we have to compute the net income

So, the net income would be equal to

= Service revenue + interest revenue - Salaries and wages expense - Travel expense

= $206 + $31 - $90 - $37

= $110

Now we can find out the ending balance of retained earnings. It is shown below:

= Beginning retained earning balance + net income - dividend paid

= $3,700 + $110 - $0

= $3,810