Answer:
$105,000
Explanation:
Given that,
Sales = $865,000
Cost of Goods Sold = $612,000
Salary Expense = 30,000
Interest Expense = 32,000
Dividends = 25,000
Income Tax Expense = 61,000
Beginning Balance of Retained Earnings = $0
Gross Income = Sales - COGS
= $865,000 - $612,000
= $253,000
Net Income before taxes:
= Gross Income - Salary Expense - Interest Expense
= $253,000 - 30,000 - 32,000
= $191,000
Net Income after Taxes:
= Net Income before taxes - Income Tax Expense
= $191,000 - $61,000
= $130,000
Ending Balance in Retained Earnings:
= Beginning Balance of Retained Earnings + Net Income - Dividends paid
= $0 + $130,000 - $25,000
= $105,000
