Critz Company was started on January 1 2018 During the month

Critz Company was started on January 1, 2018. During the month of January, Critz earned $6,800 of revenue and incurred $4,100 of expenses. During the remainder of 2016, Critz earned $63,000 and incurred $53,000 of expenses. Critz closes its books on December 31 of each year.

Required

Determine the balance in the Retained Earnings account as of January 31, 2018.

Determine the balance in the Revenue and Expense accounts as of January 31, 2018.

Determine the balance in the Retained Earnings account as of December 31, 2018, before closing.

Determine the balances in the Revenue and Expense accounts as of December 31, 2018, before closing.

Determine the balance in the Retained Earnings account as of January 1, 2019.

Determine the balance in the Revenue and Expense accounts as of January 1, 2019.

Solution

Note: 1 CALCULATION OF THE NET INCOME FOR THE YEAR 2016 Critz Earned = 63000 Less: Expenses 53000 Net Income 10000 Note: 2 CALCULATION OF THE NET INCOME FOR THE YEAR 2017 Critz Earned = $                   6,800 Less: Expenses $                   4,100 Net Income $                   2,700 Answer = 1) Determine the balance in the Retained Earnings account as of January 31, 2018. Opening Balance in retained earning (Note 1) $                 10,000 Add: Net income for the month of January 2018 $                   2,700 Balance as on January 31, 2018 = $                 12,700 Answer = 2) Determine the balance in the Revenue and Expense accounts as of January 31, 2018. Balance in revenue Account (Note2)= $                   2,700 Answer =3 Determine the balance in the Retained Earnings account as of December 31, 2018, before closing. Balance in retained Earnign before closing (Note 1) $                 10,000 Answer = 4 Determine the balances in the Revenue and Expense accounts as of December 31, 2018, before closing. There is no balance Nil Answer = 5 Determine the balance in the Retained Earnings account as of January 1, 2019. Closing Balance of Dec 31, 2018 = Balance as of January 1, 2019 $                 12,700 Answer = 6 Determine the balance in the Revenue and Expense accounts as of January 1, 2019. There is no balance in this account Nil