Gem Corp Has $100 Million in Assets and $50 Million in in Liabilities

question 114

Short Answer

Gem Corp. has $100 million in assets and $50 million in liabilities. Last year, the company earned $10 million in net profit and paid out $5 million in dividends to shareholders. What are the retained earnings for the company?
$50 million
$5 million
$45 million
$90 million
$95 million

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Definitions:

Current Prices

Prices of goods, services, or assets at the current time, without adjustment for inflation.

Goods In Transit

Items that have been shipped by a seller but not yet received by the buyer, thus in the process of being transported.

Consignment

A business arrangement where goods are left in the possession of another party to sell, but ownership remains with the supplier until sold.

F.O.B. Destination

Seller pays or is responsible for the cost of freight to purchaser’s location or destination.