Would someone see more retained earnings for an established corporation or a new start up company, why or why not?
Cumulative earnings of a corporation that are left over after dividends or any other distributions are paid off to the stockholders are called retained earnings. Simply means past earnings less dividend distributed are retained earnings.
It is obvious that an established corporation would've have more retained earnings than a new start-up . Because, retained earnings is a part of past earnings, an established corporation should have earned more significant amount of profit than a newly set up one. Thus, retained earnings for an established corporation will be more than a new start up company.
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Show the following details for Spencer Corporation in the
t-account for Retained Earnings:
At the beginning of 2018, Spencer had a $50,000 debit balance
in retained earnings
During 2018 the company earned $300,000 of net income and
closed the amount into retained earnings.
The company wants to pay a $2.00 per share dividend on each of
its 25,000 shares of common stock. How will the dividends affect
retained earnings? Show the effects in the
t-account.
Before the company can pay...
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