Question

Crawford Fishing had a net income of $35,640 in 2017. They decided to pay $3,000 in dividends and keep the rest to help expand their production line. The profit that they keep to reinvest in the business is recorded as A : a long-term investment. B : common stock. C : property, plant, and equipment. D : retained earnings.

Answer 1

The profit that they keep to reinvest in the business is recorded as D : retained earnings.

Step-by-step explanation:

Retained earnings (RE) is the amount of net income left over for the business after it has paid out dividends to its shareholders.