What is the ending balance of retained earnings for Zippy Company? Net Income, $40,000 Beginning retained...

Question

Question

What is the ending balance of retained earnings for Zippy Company?

Net Income, $40,000

Beginning retained earnings, $700,000

Dividend payout ratio, 30 %

Answer 1

Answer #1

Retained earnings = 1-Dividend payout ratio

Retained earnings = 1-30% = 70%

ending balance of retained earnings for Zippy Company = Beginning retained earnings + New retained earnings

Emding balance of retained earnings = 700000 + 0.7*40000 = $728,000

Answer 2

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