Chapter 2, Problem 9BE

a)

To determine

Identify the accounts that are classified as permanent and temporary accounts.

b)

To determine

Ascertain the retained earnings balance after the temporary accounts were closed at the end of Year 2.

c)

To determine

Ascertain the amount of net income that would be reported on the Income statement of Company E for the year ended Year 2.

d)

To determine

Explain the reasons for the difference of the net income from the ending balance of retained earnings.

e)

To determine

Report the balances in the revenue, expense, and dividend accounts on January 1, Year 3.