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Problem 1: Prior to closing entries, Adams Consulting has a $50,000 credit balance in the Retained Earnings t-account and $5,000 debit balance in the Dividends t-account. Adams reported net income of $15,000 during the period. What is the credit balance in Adams' Retained Earnings t-account after closing entries?
Option 1: $60,000
Option 2: $70,000
Option 3: $50,000
Option 4: $40,000
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