ajturner32 Posts: 7, Reputation: 1 New Member #1 Sep 29, 2007, 10:52 AM
retained earnings computation
Can someone please look at this and let me know if I am correct ?

During 2006, Edgemont Corporation had revenues of \$230,000 and expenses, including income taxes of \$190,000. On December 31, 2005, Edgemont had assets of \$350,000, liabilities of \$80,000 and capital stock of \$210,000. Edgemont paid a cash dividend of \$25,000 in 2006. No additional stock was issued. Compute the retained earnings on December 31, 2005, and 2006.

230,000 + 350,000 - 80,000 - 210,000 + 25,000 = \$315,000..

Am I on the right track here?

Thanks,
 CaptainForest Posts: 3,645, Reputation: 393 Ultra Member #2 Sep 29, 2007, 12:31 PM
R/E Dec. 31/05 = 60,000

Calculation: 350,000 - 80,000 - 250,000

R/E Dec. 31/06 = 75,000

Calculation: 60,000 - 25,000 (dividends + 40,000 (net income which is 230K - 190K)
 ajturner32 Posts: 7, Reputation: 1 New Member #3 Sep 29, 2007, 02:13 PM
Originally Posted by ajturner32
Can somone please look at this and let me know if I am correct ?

During 2006, Edgemont Corporation had revenues of \$230,000 and expenses, including income taxes of \$190,000. On December 31, 2005, Edgemont had assets of \$350,000, liabilities of \$80,000 and capital stock of \$210,000. Edgemont paid a cash dividend of \$25,000 in 2006. No additional stock was issued. Compute the retained earnings on December 31, 2005, and 2006.

230,000 + 350,000 - 80,000 - 210,000 + 25,000 = \$315,000..

Am I on the right track here?

Thanks,.
Thank you so much for your reply. I have another question though.. I cannot figure out where you came up w/ the 250,000 and the 60,000
 CaptainForest Posts: 3,645, Reputation: 393 Ultra Member #4 Sep 29, 2007, 02:58 PM
It should read 210,000, not 250,000. I hit the wrong key.

 Question Tools Search this Question Search this Question: Advanced Search

## Check out some similar questions!

Retained earnings [ 1 Answers ]

Bears Corporation had the following accounts and balances in its general ledger at December 31 ,20X9 Cash \$45,000 Accounts Payable \$80,000 Property,Plant& Equipment ...

Retained earnings [ 2 Answers ]

During 2006, Edgemont Corporation had revenues of \$230,000 and expenses, including income taxes, of \$190,000. On December 31, 2005, Edgemont had assets of \$350,000, liabilities of \$80,000, and capital stock of \$210,000. Edgemont paid a cash dividend of \$25,000 in 2006. No additional stock was...

Retained Earnings [ 1 Answers ]

During 2006, Edgemont Corporation had revenues of \$230,000 and expenses, including income taxes, of \$190,000. On December 31, 2005, Edgemont had assets of \$350,000, liabilities of \$80,000, and capital stock of \$210,000. Edgemont paid a cash dividend of \$25,000 in 2006. No additional stock was...