The beginning balance in the Common Stock account of a company was $10,000.The revenues and expenses were $200,000 and $120,000,respectively.During the year,the company declared and paid dividends for $4,000.The ending balance in the Retained Earnings was $76,000.(Assume that the opening balance of Retained Earnings was zero.)

Question

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The ending balance in Retained Earnings is calculated as: Opening Retained Earnings ($0) + Net Income ($200,000 - $120,000) - Dividends ($4,000) = $76,000.

The Beginning Balance in the Common Stock Account of a Company