# Trumpet and Trombone Manufacturing, Inc. began the year with a retained earnings balance of \$545,000. The company had a great year and earned a net income of \$190,000 this year and paid dividends of \$14,000. Additionally, the company’s controller determined that it had made an error when calculating tax expense in the preceding year, resulting in an understated expense amount of \$22,000. What is the ending retained earnings balance?

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 14, Problem 20EB
Textbook Problem
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## Trumpet and Trombone Manufacturing, Inc. began the year with a retained earnings balance of \$545,000. The company had a great year and earned a net income of \$190,000 this year and paid dividends of \$14,000. Additionally, the company’s controller determined that it had made an error when calculating tax expense in the preceding year, resulting in an understated expense amount of \$22,000. What is the ending retained earnings balance?

To determine

Introduction:

Statement of retained earnings is a financial statement in whichthe opening and closing balance of accumulated earnings as reduced by losses or dividendsis reflected.

To calculate:

The ending balance of retained earnings of Company T & T.

### Explanation of Solution

Statement of retained earnings is presented as follows:

 Statement of Retained Earnings Particulars Amount (\$) Retained Earnings in the beginning of the Year 545,000 Less: Prior period adjustment 22,000 Adjusted balanc...

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