Grason Corporation is preparing a budgeted balance sheet for 2018. The retained earnings balance at December 31, 2017 was $533,500. The 2015 budgeted income statement shows expected net income of $112,000. The company expects to declare dividends during 2018 amounting to $40,000. The expected balance in retained earnings on the 2018 budgeted balance sheet is:

Question

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The expected balance in retained earnings on the 2018 budgeted balance sheet is $605,500. This is calculated by adding the expected net income of $112,000 to the retained earnings balance at December 31, 2017 of $533,500, and then subtracting the expected dividends of $40,000.

Grason Corporation Is Preparing a Budgeted Balance Sheet for 2018