Calculate Retention Ratio Given the Following Information: Cash Dividends Paid

question 22

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:

Take-Home Pay

The amount of wages that an employee actually receives after all deductions, like taxes and retirement contributions, have been subtracted.

Gross Pay

The total amount of money an employee earns before any deductions are made.

Take-Home Pay

The amount of earnings an employee receives after deductions like taxes and retirement plan contributions are subtracted from their gross pay.

Federal Withholdings

The amount of an employee's pay withheld by the employer and sent directly to the government as partial payment of income tax.