Answer:
The correct answer is $ 49,000. (which is not in options)
Explanation:
This problem requires us to calculate value of retain earning at the end of the year. We know that assets = equity + liabilities and equity = common stock + retain earning. Following this rule we can easily calculate amount of retain earning. Detail Calculation is given below.
Asset
Accounts Receivable $30,000
Land               $42,000
Investments          $7,000
Building            $59,000
Cash and Equivalents $80,000
Equipment          $64,500
Supplies             $6,000
Total Asset          $288,500
Less
Liability
Notes Payable        $59,000
Interest Payable       $5,500
Income Taxes Payable $10,000
Accounts Payable     $38,000
Total Liabilities       $112,500
Less
Equity
Common Stock        $127,000
Retain earning         $ 49,000
