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

    Solution Summary

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