At Lexi Corp., sales revenue is $20 million, the cost of goods sold is $14 million, operating expenses are $3 million, and income taxes are $1 million. What are retained earnings?

Question

Quizplus · Accepted Answer

Retained earnings cannot be determined from the information provided because retained earnings are the portion of net income that is not distributed to shareholders as dividends but retained by the company for reinvestment. The calculation of retained earnings also requires knowledge of previous periods' retained earnings, dividends paid, and other factors not provided in the question.