Kangaroo company had the following amounts on its balance sheet as of december 31, 2018: inventory $325,000 notes payable 100,000 cash 150,000 common stock 750,000 net property, plant, & equipment 600,000 accounts receivable 30,000 accounts payable 45,000 retained earnings ? what is the balance of retained earnings? 210,000 180,000 310,000 750,000

The balance of retained earning is $210,000

Explanation:

In this question, we have to apply the accounting equation which is shown below:

Total assets = Total liabilities + shareholder's equity

where,

Total assets = Inventory + Cash + Net Property, Plant, & Equipment + Accounts Receivable

= $325,000 + $150,000 + $600,000 + $30,000

= $1,105,000

Total liabilities = Notes payable + account payable

                        = $100,000 + $45,000

                        = $145,000

And, the shareholder equity = Common stock + retained earnings

Now put these values to the above formula

So, the answer would be equal to

$1,105,000 = $145,000 + $750,000 + retained earnings

$1,105,000 = $895,000 + retained earnings

So, retained earnings = $210,000

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