Problem:
A company had a beginning balance in retained earnings of $45,250. It had net income of $6,250 and paid out cash dividends of $5,875 in the current period. The ending balance in retained earnings account is equal to:
- $114,750
- $(12,125)
- $33,125
- $45,625
- $(12,125)
Note: Provide support for your rationale.