Multiple Choice (1.5 points each)

Use Wendy's Company's adjusted trial balance to answer the next two questions. It was prepared BEFORE closing entries. All amounts are in millions of dollars. Wendy's fiscal year ended on December 29, 2019.

Adjusted Trial Balance

December 29, 2019

(All amounts in millions of dollars)

Debits

Credits

Cash and other current assets

554

Property and equipment, net

977

Goodwill and other noncurrent assets

3,464

Accounts payable and other current liabilities

350

Long-term liabilities

4,128

Common stock

47

Retained earnings

429

Dividends

96

Sales

1,709

Investment income

33

Cost of sales

597

General and administrative expense

379

Advertising expense

338

Depreciation and amortization expense

132

Interest expense

124

Income tax expense

35

Totals

$6,696

$6,696

1.Wendy's journal entry to close the revenue and expense accounts includes a:

a.Debit to Sales for $1,709 million.

b.Debit to Advertising expense for $338 million.

c.Debit to Retained earnings for $137 million.

d.Credit to Retained earnings for $429 million.

2.The Retained Earnings balance shown on Wendy's December 29, 2019 balance sheet (i.e., ENDING Retained earnings) is: ________.

a.$429 million.

b.$470 million.

c.$566 million.

d.$662 million.