Grass Gadgets had sales of $30 million and net profit of $2 million in 2012.Grass paid a dividend of $1.5 million.Assuming that their beginning balance for retained earnings was $3 million, calculate their ending balance for retained earnings.

Question

Quizplus · Accepted Answer

Beginning retained earnings = $3 million
Net profit = $2 million
Dividend paid = $1.5 million
Ending retained earnings = Beginning retained earnings+Net profit-Dividend paid
= $3 million + $2 million - $1.5 million
= $3.5 million

Grass Gadgets Had Sales of $30 Million and Net Profit