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New Member
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Sep 29, 2007, 10:52 AM
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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,
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Ultra Member
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Sep 29, 2007, 12:31 PM
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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)
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New Member
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Sep 29, 2007, 02:13 PM
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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
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Ultra Member
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Sep 29, 2007, 02:58 PM
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It should read 210,000, not 250,000. I hit the wrong key.
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