Based on the account balances at the end of year, the retained earnings are $5,000.
What are the retained earnings?
First, find the net income:
= Service revenue - Salaries
= 35,000 - 29,000
= $6,000
Then find the assets:
= 22,000 + 14,000 + 5,200
= $41,200
Then the liabilities:
= 2,200 + 16,000
= $18,200
Retained earnings:
= Assets - Liabilities - Net income - Common stock
= 41,200 - 18,200 - 6,000 - 12,000
= $5,000
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