On December 31, 2018, immediately after all the adjustments were made to Kingman Corp's accounting records for the 2018 fiscal year, but before the books were closed, the retained earnings account reflected a balance of $60,000. Kingman Corp's net income for 2018 was $12,000. Kingman paid no dividends during 2018. On the balance sheet for January 1, 2019, the balance in the retained earnings account will be

Question

Quizplus · Accepted Answer

The balance in the retained earnings account on January 1, 2019 will be the result of adding net income to the beginning balance of retained earnings and subtracting any dividends paid. Since Kingman Corp paid no dividends during 2018, the balance in the retained earnings account on January 1, 2019 will be:

Beginning balance of retained earnings + Net income

= $60,000 + $12,000

= $72,000

Therefore, the correct answer is choice B.

On December 31, 2018, Immediately After All the Adjustments Were