Sugar Tree Cookies has current net income of $268,000 of which $110,000 was paid out in dividends.The remaining $158,000 will be shown in which account on the firm's financial statements for next year?
A)long-term debt
B)common stock
C)net income
D)retained earnings
E)paid in surplus

Question

Quizplus · Accepted Answer

The remaining net income of $158,000 will be shown in the retained earnings account on the firm's financial statements for next year as it represents the portion of the net income that is not paid out to shareholders as dividends but is kept by the company for future use or investments.

Sugar Tree Cookies Has Current Net Income of $268,000 of Which