Cost of the asset$100,000
Life of the asset 5 years
Depreciation rate20%
Capital cost allowance rate 50%
Residual value of the asset nil
Income tax rate 50%
-What are dividends deducted from to show the net change in retained earnings?
A) profit for the year
B) expenses
C) profit before taxes
D) revenue

Question

Cost of the asset$100,000 
Life of the asset 5 years 
Depreciation rate20% 
Capital cost allowance rate 50% 
Residual value of the asset nil 
Income tax rate 50%
-What are dividends deducted from to show the net change in retained earnings?
A) profit for the year
B) expenses
C) profit before taxes
D) revenue

Quizplus · Accepted Answer

Dividends are deducted from the profit for the year (after all expenses, including taxes, have been accounted for) to show the net change in retained earnings.

Cost of the Asset$100,000