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
Accepted Solution
A:
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 - DividendsHere, it is given:Income = 5000Dividends = 200Hence,Retained Earnings = 5000 - 200 = $4800