The beginning balance in the Retained Earnings account of a company was $10,000.The revenues and expenses were $200,000 and $120,000,respectively.During the year,the company paid dividends of $4,000.The ending balance in Retained Earnings was $90,000.

Question

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The ending balance in Retained Earnings should be $86,000, calculated as $10,000 (beginning balance) + $200,000 (revenues) - $120,000 (expenses) - $4,000 (dividends).

The Beginning Balance in the Retained Earnings Account of a Company