ABC Inc. had beginning retained earnings of $64,080. During the year, the compan
ID: 2739658 • Letter: A
Question
ABC Inc. had beginning retained earnings of $64,080. During the year, the company reported sales of $127,800, costs of $89,900, depreciation of $11,200, dividends of $2,800, and interest paid of $3,400. The tax rate is 35%. What is the retained earnings balance at the end of the year? ABC Inc. had beginning retained earnings of $64,080. During the year, the company reported sales of $127,800, costs of $89,900, depreciation of $11,200, dividends of $2,800, and interest paid of $3,400. The tax rate is 35%. What is the retained earnings balance at the end of the year?Explanation / Answer
Therefore, the Retained earnings balance at the end of the year is $76425.
Particulars Amount($) Sales 127800 Less: Costs 89900 Gross Profit 37900 Depreciation 11200 Eearnings before Interest (EBT) 26700 Interest paid 3400 Earnings Before Tax 23300 Tax @35% 8155 Earnings After Tax(EAT) 15145 Retained Earnings Statement Particulars Amount($) Beginning Balance 64080 Add: Earnings after tax 15145 Less: Dividend Paid -2800 Ending Balance 76425