Originally Posted by

**Krissy57af**
I used assets=liabilites+equity to solve for equity and got $65,000.

You're off to a good start, Krissy.

You're also correct that ending Retained Earnings must be 35K. One thing to consider, though, is that Retained Earnings is

*reduced *by Dividends. The "Retained Earnings" equation plays out like this...

[Beginning RE] + [Net Income (or minus Net Loss)] - [Dividends] = [Ending RE]

Since this is the company's initial year, Beginning RE is zero. With this, plus what's been given, and tossing in what you've calculated yourself, this equation becomes

**0 + [Net Income] - 16 = 35 **(all in thousands, of course). Use that to find Net Income, then use your

**Net Income = Revenues minus Expenses **equation to wrap it up.