At September 1, 2014, Fitz Inc. reported Retained Earnings of $1,692,000. During the month, Fitz generated revenues of $240,000, incurred expenses of $144,000, purchased equipment for $60,000 and paid dividends of $24,000. What is the balance in Retained Earnings at September 30, 2014?
a. $96,000 credit
b. $1,764,000 credit
c. $1,704,000 credit
d. $1,692,000 debit
e. None of the above
The dividend also depends on the amount of profit the company makes each year. Companies are eligible to issue a non-recurring special dividend, and these dividends can be allocated individually.
Answer and Explanation: 1
The correct option is (B) i.e. $1,764,000 credit.
Calculation of balance in retained earnings:
|Net income ($240,000 - $144,000)...|
See full answer below.
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fromChapter 16 / Lesson 1
Dividends are incentives in the form of payments to shareholders of a company. Explore the different types of dividends and the standard method of payments that they occur in.