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  • Mar 25, 2009, 07:13 AM
    harmandeep
    Statement of retained earnings?
    Firm A has COGS equal to $500000 for the year ended 2004.gross profit for the year also was $500000 and the profit margin for the year was 15%.the retention rate for the year was 80%,and year 2004 was the firm first year of operations.
    Based on the info. please provide the statement of retained earnings for the yearended2004 for firm A.
  • May 4, 2009, 06:47 AM
    ROLCAM

    Firm A has Cost of Goods Sold equal to $500,000 for the year ended 2004.

    Gross profit for the year also was $500,000 and the profit margin for the year was 15%.

    The retention rate for the year was 80%,and year 2004 was the firm first year of operations.
    Based on the info. please provide the statement of retained earnings for the year ended 2004 for firm A.

    ______________________________________

    2004.

    Sales = $1,000,000
    Cogs = $ 500,000
    _______________
    Gross margin = $ 500,000
    Expenses ***= $ 350,000
    ___________________________

    Net Profit ****= $150,000 = 15% of Sales.
    ============================

    Statement of retained earnings for the year ended 2004 .

    NET PROFIT as above = $150,000.
    Dividend 20% ******= $ 30,000.
    ______________________________

    RETAINED EARNINGS = $120,000 = 80% N P.

    ==============================

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