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A Firm Reports Net Income of $500,000 for 2011

Question 87

Multiple Choice

A firm reports net income of $500,000 for 2011.The most recent balance sheet for the reports retained earnings of $2,000,000.The firm will pay out 25% of net income as dividends.What will the new balance be for retained earnings?


A) $1,875,000
B) $2,125,000
C) $2,375,000
D) $2,500,000

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