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A company started the year with $65,000 in its common stock account and a credit balance in retained earnings of $30,000. Dur
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Answer #1

Answer: $40,000

Credit balance in retained earnings account $30,000

Add: Net income for the year $15,000

Less: Dividends declared and paid $5,000

Amount of retained earnings at the endof the year $40,000

Common stock is part of equity and not part of retained earnings. Dividends are paid out of retained earnings.

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