Questions: Given that Jacob's Chocolates Company had beginning retained earnings of 4,000; net income during the period of 10,000; and dividends of 300 calculate the ending balance in the retained earnings account. 6,300 14,300 13,700

To calculate the ending balance in the retained earnings account, we use the formula:

\[ \text{Ending Retained Earnings} = \text{Beginning Retained Earnings} + \text{Net Income} - \text{Dividends} \]

Given:

• Beginning Retained Earnings = \$4,000
• Net Income = \$10,000
• Dividends = \$300

Substitute these values into the formula:

\[ \text{Ending Retained Earnings} = \$4,000 + \$10,000 - \$300 \]

\[ \text{Ending Retained Earnings} = \$14,000 - \$300 \]

\[ \text{Ending Retained Earnings} = \$13,700 \]

The answer is the third one: \$13,700.

Explanation for each option:

• \$6,300: This is incorrect because it does not account for the full net income and dividends correctly.
• \$14,300: This is incorrect because it does not subtract the dividends from the sum of beginning retained earnings and net income.
• \$13,700: This is correct as it accurately reflects the calculation of beginning retained earnings plus net income minus dividends.