Final answer:
The balance of retained earnings for Essex Corporation at December 31, 2014, would be part of the total equity, which is 30. Without additional information on the equity breakdown, we may assume that the entire equity amount might possibly represent retained earnings.
Step-by-step explanation:
To determine the balance of retained earnings at Essex Corporation at December 31, 2014, we need to apply information from the balance sheet. Specifically, we can use the following information provided: assets which include reserves (30), bonds (50), and loans (50); and liabilities which include deposits (300) and equity (30).
Typically, the retained earnings figure is found in the equity section of the balance sheet. Retained earnings represent the cumulative amount of earnings that have been kept (or retained) in the business over time after dividends to shareholders are paid. Retained earnings are part of the equity section which also includes contributed capital and other elements.
Calculation of Retained Earnings
To calculate retained earnings if not directly given, one would typically consider the beginning retained earnings balance, add net income, and subtract any dividends paid to shareholders. However, in this scenario, we do not have information on net income or dividends, only the total equity. Assuming the initial retained earnings and contributed capital are unknown and the entire equity at the end of the year is given as 30, this entire amount may possibly represent total shareholders' equity, of which retained earnings are a part unless otherwise clarified. Therefore, without additional details on the breakdown, we may assume the balance of retained earnings to be 30.