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Balanced sheet: retained earnings

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Big Golf Corp paid taxes of $ 90,000 and purchased equipment worth $175,000 during the year that ended June 30, 2008. The firm had net income of $500,000 during the year ended June 30, 2008. After paying out $95,000 in dividends, the balance went into retained earnings. If the firm's total retained earnings were $900,000, what was the level of retained earnings on its balance sheet on July 1, 2007?

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Solution Summary

This solution contains explanation of how to determine retained earnings on balanced sheets.

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Answer:

Given that,
Purchase price of equipment=$175,000
Net ...

Solution provided by:
Jayant Kumar, MBA
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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