On January 1, 2008, Pitt Company purchased an 80% investment in Saxe Company. The acquisition cost was equal to Pitt’s equity in Saxe’s net assets at that date. On January 1, 2008, Pitt and Saxe had retained earnings of \($500,000\) and \($100,000,\) respectively. During 2008, Pitt had net income of \($200,000,\) which included its equity in Saxe’s earnings, and declared dividends of \($50,000.\) Saxe had net income of \($40,000\) and declared dividends of \($20,000.\) No other intercompany transactions between the parent and subsidiary occurred.
Required:
What should the consolidated retained earnings be on December 31, 2008?