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uranmaximum [27]
3 years ago
8

Rick's Internet Corporation's balance in Retained Earnings is $30,000. The board of directors directs that $15,000 be appropriat

ed for future business expansion. This will cause total retained earnings to
A. increase by $15,000.
B. increase or decrease $5,000, as determined by the board.
C. decrease by $15,000.
D. remain at $30,000.
Business
1 answer:
gtnhenbr [62]3 years ago
6 0

<u>Answer</u> is D. remain at $30,000.

<u>Explanation:</u>

Rick's Internet Corporation balance in retained earnings = $30,000

Appropriated earning for future business expansion = $15,000

This appropriated earning set for future use will have no effect on the total retained earnings, because for appropriate retained earnings,  the entry is to debit the retained earnings account.

Also, it would be board's decision if they want to use the money from the retained earnings or add more capital to it.

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