AccountingBLOCK

I am stuck on this problem. Here it is:

From the data given below, calculate the Retained Earnings balance as of Dec. 31, 2004.

Retained Earnings, Dec. 31, 2003 $420,000
Cost of Equipment purchased in 2004 $125,000
Net income for year ended Dec. 31, 2004 $63,000
Dividends declared and paid in 2004 $55,000
Decrease in cash balance from 1/2/04-12/31/04 $12,000
Decrease long term debt in 2004 $67,000

I know the formula for retained earnings is beginning balance + Net income - Dividends, but what do I do with the rest of the stuff and how do I find the beginning balance??

This is a classic retained earnings question right out of the textbook

The general equation can be expressed as following:

Ending Retained Earnings = Beginning Retained Earnings - Investments - Dividends Paid + Net Income

That said, lets deal with the question:

$420,000 + $63,000 - $125,000 - $55,000 = $303,000

Other data given in this question is irrelevant!

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Owner Zindah, Inc.
A.A Accounting
B.S Accounting