Question

Crawford Fishing had a net income of $35,640 in 2022. 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 reported as_____________.

Answer 1

Answer: Retained Earnings

Step-by-step explanation

The profit for the year less the dividends paid, is finally adjusted in the balance sheet under the name Retained earnings. This means that the retained profits increases the equity by the amount retained.