Sonnan Company Showed Profits for the Last Two Years Totaling

question 88

Essay

Sonnan Company showed profits for the last two years totaling $120,000 and $260,000, respectively. Sonnan Company paid a total of $90,000 to its owners over the two-year period.
A. How much remains in Sonnan Company as retained earnings at the end of the second year of business?
B. Briefly explain the concept of 'earning power' as it pertains to Sonnan Company.

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Definitions:

Fertilization

the process of a sperm cell uniting with an egg cell, resulting in the formation of a zygote and the beginning of pregnancy.

Ova

The female reproductive cells in animals and plants; egg cells in humans.

Genetics

The branch of biology that studies genes, genetic variation, and heredity in organisms.

Inborn

Characteristics, traits, or abilities present at birth, not acquired or learned through experience.