Statement of Retuned Earnings
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1. Last year, Jefferson Motors had retained earnings of $710,000 at the end of the year. This year, Jefferson paid a dividend of $55,000 and its end of the year retained earnings was $780,000. What was the net income of Jefferson motors?
2. In your opinion if the firm has a high retained earnings balance, could it still need to borrow cash to make required payments?
3. What if the firm finished this year with exactly the same amount of retained earnings as it had at the end of last year? Would that mean that the dividend must equal the net income, negative net income this year, no dividends this year or even had a zero net income this year, and what do you think and why?
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Step by step solution showing the net income of Jefferson motors and other solutions in details.
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Answer 1
Retained Earnings at the end of the year $780,000
Add: Dividend Paid $55,000
Total $835,000
Less: Retained Earnings at the beginning of the year $710,000
Net Income for the year $125,000 ...
Education
- Chartered Accountant (Equivalent to CPA in US), Institute of Charted Accountants of India
- Bachelor of Commerce, West Bengal University
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