On December 31, 2010, immediately after all the adjustments were made to Kingman Corp's accounting records for the 2010 fiscal year, but before the books were closed, the retained earnings account reflected a balance of $50,000. Kingman Corp's net income for 2010 was $12,000. Kingman paid no dividends during 2010. On the balance sheet for January 1, 2011, the beginning balance in the retained earnings account will be

Question

Quizplus · Accepted Answer

The beginning balance in the retained earnings account for January 1, 2011, will be $62,000. This is because the retained earnings at the end of 2010 were $50,000, and with a net income of $12,000 and no dividends paid, the retained earnings increase by the net income amount.

On December 31, 2010, Immediately After All the Adjustments Were