Questions: BLUE SPRUCE COMPANY Trial Balance August 31, 2025 Before Adjustment After Adjustment --------------- Dr. Cr. Dr. Cr. Cash 11,320 11,320 Accounts Receivable 8,310 8,840 Supplies 2,910 1,880 Prepaid Insurance 4,060 2,690 Equipment 16,000 16,000 Accumulated Depreciation-Equipment 3,600 4,800 Accounts Payable 5,180 5,180 Salaries and Wages Payable 0 1,280 Unearned Rent Revenue 1,860 1,050 Common Stock 15,460 15,460 Retained Earnings 5,050 5,050 Dividends 2,570 2,570 Service Revenue 33,620 34,150 Rent Revenue 13,620 14,430 Salaries and Wages Expense 16,170 17,450 Supplies Expense 0 1,030 Rent Expense 17,050 17,050 Insurance Expense 0 1,370 Depreciation Expense 0 1,200 578,390 78,390 81,400 81,400

To prepare the Retained Earnings Statement for Blue Spruce Company, we need to follow these steps:

1. Start with the beginning Retained Earnings balance.

   • From the trial balance, the beginning Retained Earnings is $5,050.

2. Add Net Income.

   • Calculate Net Income by subtracting total expenses from total revenues.
   • Revenues:
     • Service Revenue: $34,150
     • Rent Revenue: $14,430
     • Total Revenues = $34,150 + $14,430 = $48,580
   • Expenses:
     • Salaries and Wages Expense: $17,450
     • Supplies Expense: $1,030
     • Rent Expense: $17,050
     • Insurance Expense: $1,370
     • Depreciation Expense: $1,200
     • Total Expenses = $17,450 + $1,030 + $17,050 + $1,370 + $1,200 = $38,100
   • Net Income = Total Revenues - Total Expenses = $48,580 - $38,100 = $10,480

3. Subtract Dividends.

   • Dividends are $2,570.

4. Calculate the ending Retained Earnings.

   • Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends
   • Ending Retained Earnings = $5,050 + $10,480 - $2,570 = $12,960

Retained Earnings Statement:

Blue Spruce Company
Retained Earnings Statement
For the Year Ended August 31, 2025

Beginning Retained Earnings:      $5,050
Add: Net Income                   $10,480
                                  -------
                                  $15,530
Less: Dividends                   $2,570
                                  -------
Ending Retained Earnings:         $12,960

This statement shows the changes in retained earnings for the period, reflecting the company's profitability and dividend distribution.