Reference no: EM132695285

The records of Groot Corp. for calendar 2020 reflected the following correct pre-tax amounts:

Gain from discontinued operations, $50,000;

Cash dividends declared and paid, $45,000;

Retained earnings, January 1, 2020, $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

Problem 1: Calculate the December 31, 2020 ending balance of retained earnings.