A Firm Has Year End 2001 and 2002 Retained Earnings

question 89

Multiple Choice

A firm has year end 2001 and 2002 retained earnings balances of $670,000 and $560,000,respectively. The firm paid $10,000 in dividends in 2002. The firm's net income after taxes in 2002is ___________.

• A) $100,000
• B) $110,000
• C) -$100,000
• D) -$110,000

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Definitions:

Ending Units

The quantity of inventory items or goods unsold at the end of an accounting period.

Production Budget

An estimate of the total cost of production that includes direct labor, raw materials, and overhead expenses for a specific period.

Budgeted Unit Sales

The forecasted quantity of products that a company plans to sell over a specific period.

Beginning Finished Goods

The inventory of finished products available for sale at the start of an accounting period.