Retained earnings at the beginning of the year is $100,000. Total assets are $400,000. Liabilities are $250,000. Net income for the year is $25,000. Dividends are $5,000. What is ending retained earnings? $270,000 O $120,000 O $520,000 O $150,000

Retained earnings at the beginning of the year is $100,000. Total assets are $400,000. Liabilities are $250,000. Net income for the year is $25,000. Dividends are $5,000. What is ending retained earnings? $270,000 O $120,000 O $520,000 O $150,000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Retained earnings at the beginning of the year is
$100,000. Total assets are $400,000. Liabilities are
$250,000. Net income for the year is $25,000.
Dividends are $5,000. What is ending retained earnings?
A
O $270,000
O $120,000
O $520,000
O $150,000

Expert Solution

Step 1

The retained earnings indicate the balance of undistributed profits. The retained earnings mean the profit left to the company after paying for all the expenses taxes and dividends. The retained earnings are one of the major sources of funds for the company which it can use to expand the business and achieve growth.

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