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If a corporation earns $370,000, and the payout ratio is 40%, what is the change in retained earnings

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 9MC: A company has pre-tax or operating income of $120,000. If the tax rate is 40%, what is the companys...

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Question

If a corporation earns $370,000, and the payout ratio is 40%, what is the change in retained earnings?

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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