Computing Financial Statement Measures

The following pretax amounts are taken from the accounting records of Mastery Inc. on December 31, its annual year-end. Assume that the income tax rate for all items is 25%. The average number of common shares outstanding during the year was 20,000.

Balance, retained earnings, December 31, prior year	$ 45,000
Sales revenue	300,000
Cost of goods sold	105,000
Selling expenses	36,000
Administrative expenses	34,000
Gain on sale of investments	10,000
Unrealized holding gain on debt investments, net of tax	4,250
Prior period adjustment, understatement of depreciation from prior year	20,000
Dividends declared and paid	16,000

Calculate Retained earnings balance (December 31).