The Answer would be better understood in terms of journal entries

1. Income being transferred to Income Summary A/C
   
   Service Revenue A/c Dr--------------4,064
   To Income Summary A/C---------------------4,064
    
2. Expenses being charged to Income Summary A/C
   
   Income Summary A/C Dr---------------3,828
   To Salries and Wages A/C-----------------------1,344
   To Miscellaneous Expense A/C-----------------256
   To Supplies Expense A/C-------------------------2,228
    
3. Balance of income summary which will be closed by retained earnings = 4064-3828 = 236
   
   Income Summary A/C Dr-----------236
   To Retained Earnings A/C---------------236

Therefore the answer is DEBIT 236

New Balance of Retained Earnings = 760+236 = 996

Dividends being a capital withdrawal, will be deducted from the new balance of Retained Earnings
Therefore the Final Balance of Retained earnings would be = 996-300 = 696