Please computate retained earnings

During 2009, Edgemont Corporation had revenues of $230,000 and expenses, including income taxes, of $190,000. On December 31, 2008, 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 2009. No additional stock was issued. Compute the retained earnings on December 31, 2008, and 2009

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To compute the retained earnings, we need to consider the changes in the company's net income, dividends paid, and the retained earnings from the previous year.

Here's how you can determine the retained earnings for each year:

1. Calculate the retained earnings on December 31, 2008:
Retained Earnings (Dec 31, 2008) = Capital Stock - (Assets - Liabilities)
Retained Earnings (Dec 31, 2008) = $210,000 - ($350,000 - $80,000)
Retained Earnings (Dec 31, 2008) = $210,000 - $270,000
Retained Earnings (Dec 31, 2008) = -$60,000

2. Calculate the net income for 2009:
Net Income = Revenues - Expenses (including income taxes)
Net Income = $230,000 - $190,000
Net Income = $40,000

3. Calculate the dividends paid in 2009:
Dividends Paid = $25,000

4. Calculate the retained earnings on December 31, 2009:
Retained Earnings (Dec 31, 2009) = Retained Earnings (Dec 31, 2008) + Net Income - Dividends Paid
Retained Earnings (Dec 31, 2009) = -$60,000 + $40,000 - $25,000
Retained Earnings (Dec 31, 2009) = -$45,000

Therefore, the retained earnings on December 31, 2008, is -$60,000, and the retained earnings on December 31, 2009, is -$45,000.