Consider the following account starting balances and journal transactions involving these accounts.
Use T-accounts to record the starting balances and organize the offsetting entries for the transactions.

The starting balance of Cash is $9,900
The starting balance of Inventory is $3,800
The starting balance of Retained Earnings is $21,400

Date	Accounts and Explanation	Debit	Credit
Mar 9	Retained Earnings	3	
   Cash		3
Consumed good or service and paid expense with cash		
Mar 10	Cash	40	
   Inventory		32
Retained Earnings		8
Sold and delivered product to customer		
Mar 11	Cash	25	
   Retained Earnings		25
Sold, delivered, and received payment for service with no clear associated cost		
What is the final amount in Retained Earnings?

Note: No unit adjustments are necessary.

To solve this problem, we'll use T-accounts for the three accounts: Cash, Inventory, and Retained Earnings. We'll start by recording the beginning balances, then apply the transactions to the T-accounts, and finally, determine the ending balance of Retained Earnings.

### Step 1: Initial Balances

- **Cash:** $9,900 (debit)
- **Inventory:** $3,800 (debit)
- **Retained Earnings:** $21,400 (credit)

### Step 2: T-Accounts Setup

We'll set up the T-accounts and record each transaction. 

---

#### **T-Account: Cash**
| Debit (Dr) | Credit (Cr) |
|------------|-------------|
| 9,900      |             |
| Mar 10 - 40| Mar 9 - 3   |
| Mar 11 - 25|             |

---

#### **T-Account: Inventory**
| Debit (Dr) | Credit (Cr) |
|------------|-------------|
| 3,800      | Mar 10 - 32 |

---

#### **T-Account: Retained Earnings**
| Debit (Dr) | Credit (Cr) |
|------------|-------------|
| Mar 9 - 3  | Mar 10 - 8  |
|            | Mar 11 - 25 |

---

### Step 3: Analyze the Transactions

1. **Mar 9:** Retained Earnings debited $3 and Cash credited $3 (expense paid with cash).
   - **Impact on Retained Earnings:** Decreases by $3.
   - **Impact on Cash:** Decreases by $3.

2. **Mar 10:** Cash debited $40, Inventory credited $32, and Retained Earnings credited $8 (product sold and delivered).
   - **Impact on Retained Earnings:** Increases by $8.
   - **Impact on Cash:** Increases by $40.
   - **Impact on Inventory:** Decreases by $32.

3. **Mar 11:** Cash debited $25 and Retained Earnings credited $25 (service sold and paid for).
   - **Impact on Retained Earnings:** Increases by $25.
   - **Impact on Cash:** Increases by $25.

### Step 4: Calculate Final Balances

#### 1. **Final Cash Balance**
   - Beginning balance: $9,900
   - Additions: $40 (Mar 10), $25 (Mar 11)
   - Subtractions: $3 (Mar 9)
   - **Final Cash Balance:** $9,900 + 40 + 25 - 3 = 9,962$

#### 2. **Final Inventory Balance**
   - Beginning balance: $3,800
   - Subtractions: $32 (Mar 10)
   - **Final Inventory Balance:** $3,800 - 32 = 3,768$

#### 3. **Final Retained Earnings Balance**
   - Beginning balance: $21,400
   - Additions: $8 (Mar 10), $25 (Mar 11)
   - Subtractions: $3 (Mar 9)
   - **Final Retained Earnings Balance:** $21,400 + 8 + 25 - 3 = 21,430$

### Final Answer
The final balance in Retained Earnings is **$21,430**.

---

Do you want more details or have any questions?

### Related Questions:
1. How are T-accounts useful in financial accounting?
2. What is the impact of expenses on Retained Earnings?
3. How do sales transactions affect the Cash and Inventory accounts?
4. Why is it important to track retained earnings in accounting?
5. What happens to retained earnings when dividends are paid?
6. How would a return of sold inventory affect these accounts?
7. What other types of transactions can affect retained earnings?
8. How do service revenues differ from product sales in accounting entries?

### Tip:
Always double-check your T-accounts to ensure that debits and credits are accurately recorded to avoid discrepancies in the final balances.

Explore how T-accounts are used to track financial transactions and calculate final balances, focusing on Retained Earnings. Learn step-by-step how to record transactions and determine the final balance in Retained Earnings.

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