Lakeview Industries Had Sales of $40 Million and Net Income

question 44

Multiple Choice

Lakeview Industries had sales of $40 million and net income of $2 million in 2012.Lakeview paid a dividend of $1.5 million.Assuming that their beginning balance for retained earnings was $4 million,calculate their ending balance for retained earnings.

• A)$4.5 million
• B)$2.5 million
• C)$3 million
• D)$4 million

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Definitions:

Obligee

The party in a contractual agreement who is owed a performance or payment by another party (the obligor).

Assignee

An individual or entity to whom rights or interests are transferred by another, known as the assignor.

Good Faith

Acting with honesty and sincerity without intention to defraud or seek an unfair advantage.

Delegation

The act of assigning responsibility or authority from one person to another, often seen in the context of tasks and duties.