A firm had retained earnings of $100,000 in 2012 and $125,000 in 2013. The increase in retained earnings from 2012 to 2013 is
A) 12.5 percent.
B) 20 percent.
C) 25 percent.
D) 125 percent.

Question

Quizplus · Accepted Answer

The increase in retained earnings is calculated as follows: 
Retained earnings in 2013 - Retained earnings in 2012 = $125,000 - $100,000 = $25,000
The percentage increase is calculated as follows:
($25,000 ÷ $100,000) x 100% = 25%
Therefore, the correct answer is C) 25 percent.

A Firm Had Retained Earnings of $100,000 in 2012 and $125,000