Allen's Roofing posts $5,000 in net income and $200 in dividends for the year. How does this affect the retained earnings on the

Question

3 years ago

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Allen's Roofing posts $5,000 in net income and $200 in dividends for the year. How does this affect the retained earnings on the

balance sheet? SELECT ONLY ONE Retained earnings increases by $4,800 Retained earnings increases by $5,000 Retained earnings increases by $5,200 Retained earnings decreases by $4,800 Retained earnings decreases by $5,000

Mathematics

2 answers:

kumpel [21] · Answer 1 · 2022-07-28T01:51:55+03:00

Answer:

"Retained earnings increases by $4,800"

Step-by-step explanation:

Retained Earnings are the amount of money left over for a business after it has paid its dividends from its net income.

Simply put:

Retained Earnings = Income - Dividends

Here, it is given:

Income = 5000

Dividends = 200

Hence,

Retained Earnings = 5000 - 200 = $4800

Leni [432] · Answer 2 · 2022-07-28T03:30:34+03:00

Answer:

Retained earnings increases by $4,800

Step-by-step explanation:

Net income increases retained earnings, while distributed dividends decrease retained earnings. Retained earnings is simply the amount of net income left after distributing dividends.

The net change in retained earnings = net income - distributed dividends = $5,000 - $200 = $4,800 increase