Answer:
Closing/ New Level of Retained Earnings = $170,000
Explanation:
As for the provided information,
Retained earnings opening balance = $140,000
Net Profits after taxes = $65,000
This balance of net profit which is after taxes includes the dividend earned, which shall be the part of income, as the dividend earned is part of our income in case not reduced from carrying value of investment, as in case of investment in any company's stock for less than 20% share.
Also the preference dividend paid tends to reduce the net income to be added to retained earnings.
Therefore, closing balance of retained earnings:
= $140,000 + $65,000 - $35,000 = $170,000
