Question

The Retained Earnings account had a beginning credit balance of $26,000. During the period, the business had a net loss $12,000, and the company paid dividends of $8,000. The ending balance in the Retained Earnings account is:

Answer 1

Answer:

$6,000

Explanation:

Data provided

Beginning credit balance = $26,000

Net loss = $12,000

Paid dividends = $8,000

The calculation of Retained Earnings account is given below:-

Retained Earnings = Beginning balance - Net loss - Dividend

= $26,000 - $12,000 - $8,000

= $26,000 - $20,000

= $6,000

So, for computing the retained earning we simply applied the above formula.