Use the following information to answer the question:

December 31 ($000)

Stockholder's equity 1,000

Accrued Expenses 400

Cost of Goods Sold 800

Accumulated Depreciation 200

General & Administrative Expenses 120

Tax Rate 40%

Preferred stock dividends 100

Interest expense 15

Sales revenue 2,000

Depreciation expense 200

Gross Profit 1,200

Calculate net income for this situation.

Net income is $100,000 and preferred dividends paid are $100,000 and common stock dividends paid are $100,000. Beginning retained earnings were $500,000. Calculate the ending balance in retained earnings.