Calculate Retention Ratio Given the Following Information: Cash Dividends Paid

question 210

Multiple Choice

Calculate retention ratio given the following information: cash dividends paid = $35,525; sales = $900,000; cost of goods sold = $625,000; selling and administrative expenses = $100,000; interest expense = $30,000; tax rate= 30%.

• A) 70%
• B) 30%
• C) 50%
• D) 35%
• E) 65%

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Definitions:

Current Liabilities

Financial obligations or debts of a business that are due to be paid within a year.

Measurement Alternative

A choice given to companies under accounting principles to measure certain assets or liabilities at cost or at fair value, depending on which reflects the substance of the transaction better.

FASB

The Financial Accounting Standards Board (FASB) is an independent organization that establishes accounting and financial reporting standards for companies and non-profit organizations in the United States.

Balance Sheet Element

Components of a balance sheet which typically include assets, liabilities, and shareholders' equity.