Felton Financial Inc,had net earnings last year of $487,000.If the firm has a dividend payout policy of 30%,what was the addition to retained earnings?
A)$340,900
B)$487,000
C)$146,100
D)There is not enough information to answer this question.

Question

Quizplus · Accepted Answer

The addition to retained earnings is equal to the net earnings multiplied by the percentage of earnings retained. In this case, the net earnings are $487,000 and the dividend payout policy is 30%, so the addition to retained earnings is $487,000 x (1 - 0.30) = $340,900.

Felton Financial Inc,had Net Earnings Last Year of $487,000