The Embroidery Shop Pty Ltd had beginning retained earnings of $18 670.During the year,the company reported sales of $83 490,costs of $68 407,depreciation of $8200,dividends of $950,and interest paid of $478.The tax rate is 35 per cent.What is the retained earnings balance at the end of the year?

Question

Quizplus · Accepted Answer

The correct answer is A because the retained earnings balance at the end of the year is $21 883.25. This is calculated by taking the beginning retained earnings of $18 670, adding the net income for the year of $6 583.25, and subtracting the dividends paid of $950. The net income is calculated by taking the sales of $83 490, subtracting the costs of $68 407, the depreciation of $8200, and the interest paid of $478, and then multiplying the result by the tax rate of 35%.

The Embroidery Shop Pty Ltd Had Beginning Retained Earnings of $18