Answer :
The amount of retained earnings of the company is $26,000 and the net book value of the company is $35,000.
What is retained earnings?
Retained earnings is a corporation's cumulative profit or loss that has not been distributed to its stockholders. It is shown in the company's balance sheet under the shareholders' equity section. They are used to finance future growth and development of the company, such as the construction of new factories or the introduction of new goods and services.
What is net book value?
Net book value is the cost of an asset less its accumulated depreciation. It's a common calculation used in finance and accounting to assess the worth of a firm. The net book value of a firm is usually equal to the total assets minus the total liabilities, or the total shareholders' equity (stockholders' equity).
Calculation of retained earnings:
Total stockholders' equity = Capital stock + Retained earnings $29,000 = $3,000 + Retained earnings
Retained earnings = $26,000
Calculation of net book value:
Total assets = $90,000 - $55,000 (notes payable) = $35,000
Total liabilities and stockholders' equity = $70,000 + $29,000 = $99,000
Net book value = $35,000 - $0 (no accumulated depreciation on assets) = $35,000
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