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    Book Value of Retained Earning

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    The value of Retained Earnings reflected on the Balance Sheet, then, reflects the total of all earnings retained since company inception.

    A question for you, is the book value of Retained Earnings the value that the company has the option to pay out as current dividends? Why or Why not?

    Please include references.

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    https://brainmass.com/business/accounting/book-value-retained-earning-173205

    Solution Preview

    The response address the queries posted in 508 words with references.
    //As per the directions, we will write about the 'Retained Earnings' for paying the current dividends by the Company. Then, we will write about the book value of the retained earnings the value that the Company has the option to pay out as current dividends. It will assist in understanding the importance of retained earnings reflected by the balance sheets.//

    Retained Earning to pay Current Dividend

    When a company earns profits, it can pay these profits to its shareholders as a cash dividend, or retain the earnings and reinvest them in the business; this decision lies with the Board of Directors. Many companies in UK retain a portion of their earning and the remainder is paid as a dividend. This can typically exclude 70% of dividend income from taxation. In the areas ...

    Solution Summary

    The response address the queries posted in 508 words with references.

    $2.19

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