Homework Answers
Correct answer----a. 26,295
|
A |
Sales |
$ 6,72,500 |
|
B= A x 4.6% |
Net profit expected |
$ 30,935 |
|
C= B x 15% |
Dividend expected |
$ 4,640 |
|
D=B-C |
Net increase in retained earnings |
$ 26,295 |
Dividends decreases retained earnings balance and net profit increases retained earnings. We get net increase in retained earnings if we deduct dividends from net income.
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