The Income Statement for Dobson Corporation Reported Net Income of $22,400

question 5

Essay

The income statement for Dobson Corporation reported net income of $22,400 for the year ended December 31 before considering the following:
During the year, the company purchased available-for-sale securities.
At year-end, the fair value of the investment portfolio was $2,100 more than cost.
The balance of Retained Earnings was $83,000 on January 1.
Dobson Corporation paid $9,000 in cash dividends during the year.
Calculate the balance of Retained Earnings on December 31.

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Definitions:

Cash Balances

The total amount of cash in a company's account at any given time, which can be used for transactions or as a reserve.

Receivables Financing

A form of financing where a company uses its outstanding invoices or receivables as collateral to secure a loan or advance.

Administrative Fee

Charges imposed by investment funds or companies to cover operational and management expenses.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity of the business.