The beginning balance in the Retained Earnings account of a company was $11,000. The revenues and expenses were $240,000 and $160,000, respectively. During the year, the company paid dividends of $6,000. The ending balance in Retained Earnings was $91,000.

Question

Quizplus · Accepted Answer

The correct ending balance in Retained Earnings should be $85,000, calculated as follows: Beginning balance ($11,000) + Revenues ($240,000) - Expenses ($160,000) - Dividends ($6,000) = $85,000.

The Beginning Balance in the Retained Earnings Account of a Company