Asked by Jazzy Asberry on Jul 18, 2024
Verified
Total assets are $37,500,total liabilities are $20,000 and common stock is $10,000;therefore,retained earnings are $7,500.
Retained Earnings
The portion of net income that is not distributed to shareholders as dividends but retained by the company for reinvestment.
Total Assets
The sum of all currently owned resources that have value which can be converted into cash and are used in operating the company.
Liabilities
Financial obligations or debts a company owes to others, expected to be settled over time through the transfer of assets, provision of services, or other economic benefits.
- Calculate retained earnings using basic financial information.
Verified Answer
KS
Kayland SebriaJul 19, 2024
Final Answer :
True
Explanation :
Total assets minus total liabilities and common stock equals retained earnings. In this case, $37,500 - $20,000 - $10,000 = $7,500.
Learning Objectives
- Calculate retained earnings using basic financial information.