Dressler Antiques Ltd. reported retained earnings of ($125,000) on the balance sheet for the year just ended. The company is projecting a net income after tax of $1,620,000 for the coming year. Dressler has 500,000 preferred shares outstanding and 3 million common shares outstanding Both pay a dividend of $.35 per share. What is the projected balance of the Company's retained earnings at the end of the coming year?

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The projected balance of retained earnings is $270,000. This is calculated by adding the projected net income after tax of $1,620,000 to the beginning retained earnings of ($125,000) and then subtracting the projected dividends of $350,000 (500,000 preferred shares x $0.35 per share + 3,000,000 common shares x $0.35 per share).