Compute the balance in retained earnings

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Frances Corporation has outstanding 60,000 shares of $1 par value common stock as well as 10,000 shares of 7%, $100 par value cumulative preferred stock. At the beginning of the year, the balance in retained earnings was $600,000, and one year's dividends were in arrears. Net income for the current year is $360,000. Compute the balance in retained earnings at the end of the year if Frances Corporation pays a dividend of $2 per share on its common stock this year.

Reference no: EM13144775

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