We have been given that Crawford Fishing had a net income of $35,640 in 2017. They decided to pay $3,000 in dividends and keep the rest to help expand their production line.
We know that the net income that remains after paying dividends is known as 'Retained income'.
We also know that retained income can be used to pay off debts or it can be invested into business activities.
Therefore, the profit that Crawford Fishing keep to reinvest in the business is recorded as retained income.
Direct relation. If iron is used to make steel, and iron is cheaper now, steel will also be cheaper. Decrease in price can mean they have a bunch of it, a surplus. Supply and demand says if you got a lot of something prices go down. So if you have a lot of cheap iron, you can make a lot of cheap steel