Calculate Retention Ratio Given the Following Information: Cash Dividends Paid

question 355

Multiple Choice

Calculate retention ratio given the following information: cash dividends paid = $4,200; sales = $80,000; cost of goods sold = $30,000; selling and administrative expenses = $8,000; interest expense = $2,000; tax rate = 30%.

• A) 15%
• B) 35%
• C) 85%
• D) 75%
• E) 45%

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Definitions:

Contractual Obligations

Duties that a party is bound to perform under a contract.

Operation of Law

Operation of law refers to a legal change that occurs automatically due to the application of existing law, without the need for any direct action by the parties involved.

Offer of Performance

In contract law, an attempt made by one party to fulfill their part of the agreement, indicating willingness to adhere to the terms of the contract.

Tender

An offer of payment or service in fulfillment of an obligation, such as in contract performance or debt repayment.