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The records of Groot Corp. for calendar 2018 reflected the following correct pre-tax amounts: gain from discontinued operations, $50,000; cash dividends declared and paid, $45,000;
The records of Groot Corp. for calendar 2018 reflected the following correct pre-tax amounts:
gain from discontinued operations, $50,000;
cash dividends declared and paid, $45,000;
retained earnings, January 1, 2018, $275,000,
correction of accounting error, $35,000 debit;
income before income taxes and before discontinued operations, $165,000.
The average income tax rate of 40 % applies to all items except the dividends.
Required
1. Calculate the December 31, 2018 ending balance of retained earnings.
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