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

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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.

This was a tough question for me to answer.

$230,000
+350,000
-80,000
-210,000
-25,000
= $265,000