Sooner Company Has Had a Net Income of $8,000,$5,000,$12,000,and $10,000

question 7

Multiple Choice

Sooner Company has had a net income of $8,000,$5,000,$12,000,and $10,000 over the first four years of the company's existence.If the average annual amount of dividends paid over the last four years is $3,000,what is the ending retained earnings balance?

• A)$47,000.
• B)$35,000.
• C)$23,000.
• D)$7,000.

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Definitions:

Pension Program

A financial arrangement designed to provide individuals with an income when they are no longer earning a regular income from employment.

Real Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing or the true return on investment.

Nominal Interest Rate

The percentage increase in money that the borrower pays the lender, not adjusting for inflation.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling, over a given period of time.