Question
The following trial balance of JB Company at December 31, 2017, has been adjusted except for income taxes. The income tax rate is 30%. DR
The following trial balance of JB Company at December 31, 2017, has been adjusted except for income taxes. The income tax rate is 30%.
DR | CR | |||
Accounts receivable, net | $725,000 | |||
Accounts payable | 250,000 | |||
Accumulated depreciation | 125,000 | |||
Cash | 185,000 | |||
Contributed capital | 650,000 | |||
Expenses | 3,750,000 | |||
Goodwill | 140,000 | |||
Prepaid taxes | 225,000 | |||
Property, plant, and equipment | 850,000 | |||
Retained earnings, 1/1/2017 | 350,000 | |||
Revenues | 4,500,000 | |||
5,875,000 | 5,875,000 |
During 2017, estimated tax payments of $225,000 were paid and debited to prepaid taxes. There were no differences between financial statement and taxable income for 2017. Included in accounts receivable is $400,000 due from a loyal customer. Special terms were granted to this customer to make payments of $100,000 semi-annually every March 1 and September 1. In JB Company's December 31, 2017 Balance Sheet, what amount should be reported as total retained earnings?
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