Final answer:
The expected balance in retained earnings on the Grason Corporation's 2018 budgeted balance sheet would be $613,500, calculated by adding the beginning retained earnings to the net income and subtracting the dividends.
Step-by-step explanation:
The expected balance in retained earnings on the 2018 budgeted balance sheet for Grason Corporation can be calculated by taking the retained earnings balance at December 31, 2017, and adding the expected net income for 2018, and then subtracting the dividends that the company expects to declare in 2018. This calculation is based on the following formula: Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends.
Using the figures given:
So, the calculation would be:
Ending Retained Earnings = $541,500 + $116,000 - $44,000
Ending Retained Earnings = $613,500
Therefore, the expected balance in retained earnings on the 2018 budgeted balance sheet would be $613,500.