Question

Midyear on July 31st, the Digby Corporation's balance sheet reported: Total Liabilities of $25.521 million Cash of $2.010 million Total Assets of $41.309 million Total Common Stock of $1.270 million. What were the Digby Corporation's retained earnings

Answer 1

Answer: $14.518 million

Explanation:

Based on he information given, we have to calculate the owner's equity first which will be:

= Assets - Liabilities

= $41.309 million - $25.521 million

= $15.788 million

Since Owners equity is the addition of the total common stock and the retained earnings. Therefore, retained earnings will be:

= Owners equity - Total common stock

= $15.788 million - $1.270 million

= $14.518 million

The retained earning is $14.518 million