David's Building Equipment (DBE) had net income of $200,000 for the year ending 2008.The company decided to payout 30% of earnings per share as a dividend.DBE has 50,000 shares issued and outstanding.What are the retained earnings for 2008?
A)$60,000
B)$140,000
C)$150,000
D)$200,000
E)None of the above.

Question

Quizplus · Accepted Answer

The company pays out 30% of its net income as dividends, which is $60,000 (30% of $200,000). The retained earnings are the remaining 70% of the net income, which is $140,000 (70% of $200,000).

David's Building Equipment (DBE) Had Net Income of $200,000 for the Year