Question

The Embroidery Shoppe has beginning retained earns of $18,670. During the year, the company reported sales of $ 83,490, costs of $68, 407, depreciation of $82,00, dividends of $950, and interest paid of $478. Tax rate is 35%. What is ending retained earnings?

A. $21,883.25
B. $22,193.95
C. $22,833.24
D. $23,783.24
E. $30,393.95

Answer 1

To find the ending retained earnings, calculate the net income and subtract dividends paid from the beginning retained earnings. There seems to be an error in the calculations or information provided as the ending retained earnings are negative.

Step-by-step explanation:

To find the ending retained earnings, we need to calculate the company's net income and subtract any dividends paid. Net income is calculated by subtracting the costs and depreciation from the sales. In this case, the sales are $83,490, costs are $68,407, and depreciation is $82,000. So, net income is $83,490 - $68,407 - $82,000 = $-66,917.

We then calculate the taxes using the tax rate of 35%. Taxes are $-66,917 * 0.35 = $-23,428.95. Finally, we subtract the dividends paid of $950 from the beginning retained earnings of $18,670 to find the ending retained earnings: $18,670 - $950 - $23,428.95 = $-5,708.95.

Since the ending retained earnings are negative, there seems to be some error in the calculations or information provided. Please double-check the numbers or consult with your teacher or professor for clarification.