On December 31, 2010, immediately after all the adjustments were made to Gilbert Inc.'s accounting records for the 2010 fiscal year, but before the books were closed, the retained earnings account reflected a deficit balance of $80,000. The sum of the pre-closing balances of all of Gilbert's temporary accounts was a net credit balance of $18,000. Gilbert paid no dividends during 2010. On the balance sheet for January 1, 2011, the beginning balance in the retained earnings account will be

Question

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The net credit balance of $18,000 in temporary accounts will reduce the deficit in retained earnings from $80,000 to $62,000, resulting in a $62,000 debit balance.

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