If the year-end financial staement the income staement shoed net income of $23,700, and the balance sheet showed ending reained earnings of $91,000. The firm determined that adjustments should be made that would increase revenues by 5,000 and increase expenses by $8,400.

Calculate the amounts of net income and retained earnings after the adjustments are made.

First thing you need to know what is Net Income. Net Income is Revenues minus Expenses. So an increase in revenues or a dercease in expenses will increase Net Income, and a decrease in revenues or an Increase in expenses will decrease Net Income.

Now knowing this you start with the Net Income of $23,700
Now add adjustments that would increase revenues by $5,000 and subtract adjustments that would increase expenses by $8,400

So: Net Income of $23,700 plus revenue increase of $5,000 minus expenses increase of $8,400 equals Corrected Net Income of $20,300

For Reataine Earnings take your ending dbalance of $91,000 and subtract out your Net Income of $23,700 and add your Corrected Net Income of $20,300 to get your Corrected Ending Retained Earnings.

So: Ending Retained Earnings of $91,000 minus Net Income of $23,700 plus Corrected Net Income of $20,300 equals Corrected Ending Retained Earnings of $87,600