Question
1- Based on the Income Statement below: Bengaluru Services Corp. Income Statement Year Ended December 31, 2019 Revenue: Fees Earned $263,000 Less Expenses: Wages 127,000
1-
Based on the Income Statement below:
Bengaluru Services Corp. Income Statement
Year Ended December 31, 2019
Revenue: | |
Fees Earned | $263,000 |
Less Expenses: | |
Wages | 127,000 |
Rent | 11,000 |
Utilities | 7,000 |
Insurance | 5,000 |
Depreciation | 1,200 |
Miscellaneous | 1,550 |
Income Before Taxes | 128,750 |
Less Taxes @21% | 27,038 |
Net Income | $101,712 |
If Bengaluru Services Corp. paid $50,000 in dividends for 2019, what amount would Retained Earnings increase on the balance sheet by? (Hint: Retained Earnings is the portion of Net Income put back into the business and not paid out to shareholders as dividends.)
Group of answer choices
$28,287
$51,712
$10,712
$18,287
2-
If a business's Debt to Equity ratio is decreasing from one year to the next, it shows the business is using lower financial leverage.
Group of answer choices
True
False
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