In estimating pro-forma balance sheets, projected retained earnings are computed as present retained earnings plus:
A) projected retained earnings and cash dividends.
B) projected retained earnings plus debt.
C) projected retained earnings plus assets.
D) projected net income minus cash dividends.
E) projected net income earnings minus debt.

Question

Quizplus · Accepted Answer

Projected retained earnings are calculated by adding the current retained earnings to the projected net income and subtracting the anticipated cash dividends. Therefore, option D is the correct choice.

In Estimating Pro-Forma Balance Sheets, Projected Retained Earnings Are Computed