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 solution provides the calculations for net income and retained earnings.