Eddie Zambrano Corporation began operations on January 1, 2022. During its first 3 years of operations, Zambrano reported net income and declared dividends as follows.

The following information relates to 2025.

Instructions

a. Prepare a 2025 retained earnings statement for Eddie Zambrano Corporation.

b. Assume Eddie Zambrano Corporation restricted retained earnings in the amount of $70,000 on December 31, 2025. After this action, what would Zambrano report as total retained earnings in its December 31, 2025, balance sheet?

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2022 2023 2024 Net Income $ 40,000 125,000 160,000 Dividends Declared $ -0- 50,000 50,000